How AI Will Impact Jobs in 2024

0:01Today on the AI Breakdown, we're looking at a variety of thoughts on what the impact of AI on jobs will be. The AI Breakdown is a daily podcast and video about the most important news and discussions in AI. Go to Breakdown.network for more information about our Discord, our newsletter, and our YouTube channel.

0:21Welcome back to the AI Breakdown. This will likely be the last show of this calendar year. And so while news is slow, I thought what might be interesting is to do a little bit of a retrospective and review on one of the hottest topics when it comes to artificial intelligence in society. While I haven't seen a study on this, my hunch is that if one were to map all of the news articles about AI that were published this year, the number one topic would likely be questions of safety and AI ex-risk. In the wake of the six-month pause letter and Jeffrey Hinton leaving Google, that just became an extraordinarily focused and media-interested narrative that obviously makes for great and terrifying headlines.

1:04However, only slightly behind, again, in my estimation, would be the question of what AI was going to do to jobs. And indeed, it's entirely possible that AI's impact on work was even more significant and loomed even larger in people's minds than the idea of some Terminator future. So let's first look at some of the studies and statistics that came out this year, and then try to understand the possibility set of what could happen when it comes to AI and employment. One of the Banner studies came out in March from Goldman Sachs that suggested that AI could replace approximately 300 million jobs worldwide.

1:38The GS report suggested that AI could replace effectively a quarter of work tasks performed in the US and Europe, which might not only mean job loss, but also a productivity boom. Indeed, that same report suggested that the total annual value of goods and services that would be produced globally would be increased by 7 % thanks to the same forces. Now that report also noted a couple other things that have been key themes throughout the year. The first is that, whereas in general we've historically had an idea that technology comes for blue-collar jobs first, in the case of AI it seems like knowledge workers and white-collar workers who are in the offing.

2:12The Goldman Sachs report argued that 46 % of tasks in the administrative sector and 44 % of the legal profession could be automated away as compared to only 6 % for construction and only 4 % for maintenance. The net impact for those white-collar jobs, Goldman thinks, is likely to be lower wages. In other words, if ChatGPT, for example, allows more people to have a certain quality of writing, that means that all the various writers will have more competition for more limited roles. Now, some studies tried to get a sense of what's actually happening right now. I will caveat all of these by noting that the numbers vary wildly.

2:47For example, one study will suggest that there's very little disruption so far and maybe even less than we think coming up, while another, like a December report from Resume Builder, said that 37 % of business leaders say that AI replaced workers this year. That was a survey of 750 business leaders that are currently using AI, and of those same leaders, 44 % of them also think there will be layoffs in 2024 that come from new efficiency gains from artificial intelligence. Now, one of the more interesting dimensions to me are people's perceptions of how much of their work that AI can do. Asana released a report called the State of AI at Work Report 2023, where they found that employees suggested that 29 % of their work tasks are replaceable by AI.

3:28Now, one of the possibilities for artificial intelligence in the workplace is that it's not entire jobs or job categories that get replaced, but entire categories of tasks that sit within jobs that get automated away, allowing theoretically for people to spend their time on more higher-order tasks. That at least is the optimistic take. Another banner survey about the perception of what percentage of tasks could be automated came from an edX survey of approximately 800 executives who estimated that 49 % of the skills that exist in their workforce today won't be relevant within two years. 47 % of those executives also believe that their workforces are unprepared for the future workplace.

4:06Among those 800 executives, they estimate that within the next five years, their organizations will eliminate 56 % of entry-level knowledge worker roles, and a full 79 % of those executives predict that today's entry-level knowledge worker jobs will simply no longer exist as an entirely new suite of roles for junior employees entering the workforce comes into play. Those executives even say that 56 % of their own roles will be completely or partially replaced by AI. Now, interestingly, this isn't something that executives are treating solely with concern. 47 % of C-suite executives believe that most or all of the CEO roles should be completely automated or replaced by AI, suggesting that even at the top echelons of leadership, there are lots of tasks that people just don't like doing that they would love to have off their plate.

4:50Another recent survey that I found really interesting came from CNBC and SurveyMonkey that basically found that the more workers use AI, the more concerned they are that it will impact their job. Now, this was another one of those really mixed studies in terms of showing how powerful the technology can be, but also why that's scary to some. So in this survey, 72 % of the people who were using AI said it made them more productive. And in many ways, the productivity gains from AI are why it has been such a hot-button item on Wall Street. There are many who think that this could be the first real true productivity boom that we've seen in many decades.

5:22Now, the part of that survey that I found most interesting was this statistic. Of those who don't use AI at work, only about 35 % said that they're worried about its impact on their job. Among those who do use AI regularly, 60 % are concerned about its impact on their job. In other words, the experience of seeing what AI can do makes people more, not less, concerned. Now, one area where it seems like AI has already started to infiltrate the workplace is in the recruitment process. The 2023 Talent Index report from BMURI found that 59 % of people looking for work this year said they'd noticed AI being used during the recruitment process.

5:57On top of that, half of the recruiters they surveyed said that they've used it for recruitment themselves. Another survey from Censuswide found that 50 % of mid-level office professionals already use AI in some form to perform tasks. And again, this idea of task replacement versus job replacement is one that you'll find is really important. So what are the possible ways that this could all play out? Broadly speaking, there are three categories of possibilities. And these are, of course, not mutually exclusive. The first is entire displacement, in other words, AI automating away entire categories of jobs.

6:32The second is task replacement or even AI augmentation, where certain categories of tasks get eliminated and people using AI rise above their peers that are not using AI because of how much more productive they are. Then a third category is, of course, entirely new jobs being created. But let's start with that first category of where there's likely to be the most entire disruption. The UK's Department of Education recently published a study that suggests that somewhere between 10 and 30 % of occupations can be automated away with AI, and unsurprisingly, that's concentrated in white-collar work.

7:05The ranking in this particular study, in terms of most exposure to AI and LLMs, was number 1. Management consultants and business analysts. 2. Financial managers and directors. 3. Accountants. 4. Psychologists. 5. Purchasing managers. 6. Actuaries, Economics, and Statisticians 7. Business and Financial Project Managers 8. Finance and Investment Analysts and Advisors 9. Legal Professionals 10. Business and Related Associate Professionals 11. Credit Controllers 12. Solicitors 13. Civil Engineers 14. Education Advisors and School Inspectors 15. Human Resources Admins 16. Business Research and Admins 17.

7:48Financial Accounts Managers 18 bookkeepers payroll managers, 19 national government administrators, and 20 marketing professionals. And now, a quick word from today's sponsor. I am a huge Notion user. We're talking multiple accounts for multiple projects. I use it for everything from applicant tracking to note taking to project management to sharing public documents to frantically capturing ideas I have while out hiking or just driving around. Given that, and given the topic of the AI breakdown, I was excited to learn that they've launched a new AI tool called Q &A. It's like a personal assistant that responds in seconds with exactly what you need.

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9:35labor. And throughout this year, we've seen more and more demos that show AI agents that are able to interact with customers in a way that isn't scripted or pre-programmed, but that can actually interact based on those customers' concerns in real time with low latency and, of course, without ever getting frustrated or losing their cool. The AI Safety Memes Accounts writes, Soon, in the next 6 to 24 months, one human in a call center may be able to do three jobs, soon after ten. If we rush to open the Pandora's box that is autonomous AI agents, we're going to have to very quickly figure out what to do with all these unemployed people.

10:08Maybe we'll find new work for them, but maybe we won't. because unlike every other economic revolution, all the other jobs they could do could also be simple enough for AI agents to do. Now, evidence in the category of the idea of you won't be replaced by AI, but by someone using AI, Stanford and MIT did a study where they found that AI did indeed increase worker productivity, in this case by 14%. Basically, the researchers from this study measured the productivity of more than 5 ,000 customer support agents who were based primarily in the Philippines, and who worked for a Fortune 500 enterprise software firm.

10:41From CNBC, quote, tech support agents who used AI tools that created conversational scripts boosted their productivity measured as issues resolved per hour by 14 % on average. However, the improvement was even more pronounced for, quote, novice and low-skilled workers who were able to get their work done 35 % faster. Now, interestingly, the impact was mostly for people who were junior. Indeed, the study found that it had a very minimal impact on experienced or highly skilled workers, and even at some points distracted that category. Some wonder if this means the real impact of AI, or one of the impacts of AI at least, will be a flattening of skill level between the top and the bottom.

11:16Obviously that could have big consequences on wages. But what about the category of new jobs? This is always the hardest to predict in advance because it's very hard for us to understand and know what types of new businesses are going to be created in the wake of some new technology boom. The New York Times recently did a profile called Wanted, New Collar Workers. The piece writes, Step aside, blue collar and white collar, pink collar and green collar. There's a new collar in town. Here's what to know. New collar jobs require advanced skills but not necessarily advanced degrees, especially in emerging high-tech fields like artificial intelligence, cybersecurity, electric vehicles and robotics.

11:55There are real fears that workers will lose jobs to technology in the coming years, but new collar optimists frame things in a more positive light. there are also real opportunities ahead. Said Sarah Boisvert, the founder of the New Caller Network, somebody has to program, monitor, and maintain those robots. Now at the same time, however, a recent Wall Street Journal report was titled, An Anticipated Wave of AI Specialist Jobs Has Yet to Arrive. And the argument of this piece is that specifically in the marketing discipline, we have intended to see roles like VP of AI Marketing. Now I'm trying not to editorialize too much, but of all the articles we've mentioned and referenced today, this one may have the the most copium of any other that I've seen.

12:33Take, for example, this quote from Richard Sanderson, who runs executive staffing firm Spencer Stewart's marketing sales and communications officer practice. I've not seen or even heard or even come remotely close to a VP of AI marketing leadership role. If we're led to believe the impact is going to be so widespread, why are we not seeing it? What is going on? Well, there are a couple things. One, I personally know at least one of those, working at Salesforce no less. Two, it's a very strange idea that for AI to have infiltrated the workplace, there needs to be a title dedicated to AI. The whole point of AI and the reason why people anticipate it to be so disruptive is its ubiquity, the fact that it impacts so many different parts of the entire professional stack.

13:13There's not going to be a VP of AI marketing per se, but the VP of visual design is going to use AI and the VP of copywriting is going to use AI, etc, etc, etc. Still, one interesting statistic from the piece was that according to Indeed, the number of marketing jobs whose descriptions mentioned AI in November of this year was 8 % lower than November of last year. Interestingly, that seems not to be the case for sales though. In that same period, listings for sales jobs were three times as likely to mention AI as listings for marketing jobs. Now, one interesting speculation around why CMOs have been a little slower to adapt to AI in this case is how recently they were burned by crypto and NFTs.

13:54Shiv Singh, the former CMO of LendingTree, suggested as much, and I don't think that's actually insignificant. So overall, where does this leave us and what are some of the trends that we can anticipate heading into next year? A BBC article points out a few that I think really resonate. One, they write, is the return to office becomes a reality. I certainly think in a world where there is increased competition from robots and autonomous agents and workers who are more productive, to the extent that bosses want people in the office, there's going to be a lot more pressure to be in the office. a second trend that I also think is going to do nothing but increase, they call labor found its voice.

14:26Now obviously when it comes to AI, the biggest labor movements were around the Writers Guild of America and the Screen Actors Guild. And while they won some concessions around AI, I think that it's very likely that we see significant increases in organized labor movements in the very near future as one of the only ways that people feel like they can slow down the incredible advance of artificial intelligence in the workplace. Now finally, let's talk about which jobs are most insulated from AI. Martin Ford, the author who wrote Rule of the Robots, How Artificial Intelligence Will Transform Everything, suggested that there are three categories that are more likely to be AI-proof or at least AI-resistant.

15:05The first, he said, would be jobs that are genuinely creative. You're not doing formulaic work or just rearranging things, but you're genuinely coming up with new ideas and building something new. Now, I don't think he means creative in the sense of just graphic design, for example, here, but instead more like strategy. Going on, he said, in science and medicine and law, people whose job is coming up with a new legal strategy or business strategy, I think that there's going to continue to be a place there for human beings. The second category that he thinks is more safe are jobs that require sophisticated interpersonal relationships.

15:35Jobs where, quote, you need a very deep understanding of people. So that could be nurses, consultants, and investigative journalists. The third category of safe jobs are, quote, Jobs that really require lots of mobility and dexterity and problem-solving ability in unpredictable environments. This is trade jobs, electricians, plumbers, welders. And again, this reinforces that idea that where AI is really going to hit is not blue-collar workers necessarily, but knowledge workers. So what to make of all of this? I personally am in the camp that the impact of AI on the workplace is going to be massive.

16:08As big or indeed bigger than more or less any of these reports are suggesting. Yet how that plays out is going to be extremely complex. And it's also going to play out inevitably slower than it would if it was left to its own technological devices. What I mean by that is that even when technology gets to a certain point of sophistication, there are human types of inertia and organizational inertias that will inevitably slow things down and allow for some amount of adaptation. In many ways, I see my great goal for the next few years during that transition process as to help as many people as possible adapt proactively in such a way that they can use this transformation to their own advantage and actually have AI not displace them, but help them achieve their dreams.

16:54If you're interested in that mission, keep an eye out for more information on this education beta and even more about what comes next. For now, I want to thank you guys for a great 2023, the first year of the AI breakdown. I appreciate each and every one of you for listening. And so until next time, peace. Thank you.