Generative AI and the Future of the Global Economy
Introduction
New advancements in artificial intelligence have the potential to completely change the worldwide economic landscape, and this is only the beginning. What impact do these AI models have on our everyday lives and more importantly, the economy, as their capabilities only grow with time? Generative AI’s sudden exponential growth has created billions of dollars in potential economic growth due to AI’s capacity to increase productivity and efficiency in companies across all fields. McKinsey reported that for the banking industry, artificial intelligence could deliver “value equal to an additional $200 billion to $340 billion annually if the use cases were fully implemented.”
What are the impacts of AI on the job market?
Powerful AI can replicate automated tasks at a much faster rate and on a larger scale than humans. As a result of increased productivity in the economy and the current capabilities of modern AI, humans will be the ones who lose the most during this time. For example, a new upcoming AI tool, Deepsheet, can generate Excel files for almost any use case, which was the entire job for many financial analysts on Wall Street. Many will be forced to shift to higher-level jobs involving research and development, which are harder for AI to inhabit. This may force many people to learn new skills and push many more out of their current jobs. Over 300 million jobs worldwide could be affected by AI, according to a Goldman Sachs analysis published in March. This is only the start, as the exponential growth continues to increase. More complex jobs that were thought to be irreplaceable by AI, like managers or directors, could soon be overtaken by more powerful language-related AI, similar to ChatGPT or Bard.
Looking Ahead
However, history has shown that when new technologies emerge, new jobs are created to capitalize on the new wave. At this point in time, most jobs stand to gain from generative AI, using it as a helpful tool to streamline tasks so employees are more efficient and can focus their time on other work. Software engineers can use new AI tools like Github Copilot to help them write code quicker and more efficiently. As generative AI only continues to permeate the workforce, the question remains whether the billions of dollars in potential economic growth outweigh the negative redistribution of labor and job loss that it brings.
Image courtesy of McKinsey and Company: Generative AI has the most potential impact on software and customer-facing applications.