John McCarthy, an American computer scientist who coined the term artificial intelligence back in 1955, famously said that AGI would arrive somewhere between 5 and 500 years.
But AI is here now. It’s no longer a thing of science fiction.
It’s already transforming how we live, work, and think about the future.
But what will this mean for the economy?
Will AI push millions of people out of work and when will it happen?
The best question you could ask yourself every day is this: How can I adapt to the age of AI we’re living in right now?
On my YouTube channel, I’ve covered job displacement quite a bit. I talked about how AI will wipe out a billion jobs by 2030, how it will kill white-collar work, and how it will affect blue-collar industries.
But today I want to touch on the economy as a whole.
According to studies, AI could add $15.7 trillion to our global economic activity, and by 2030, 70% of all companies will have embraced the AI revolution and adopted at least one type of AI technology.
A report by Goldman Sachs also said AI will directly replace 300 million full-time jobs, and researchers from the University of Pennsylvania and OpenAI have said that it’s the white-collar workers earning around $80,000 a year that are the most likely to be affected by workforce automation.
But even beyond white-collar, an MIT and Boston University report predicted that 2 million manufacturing jobs are going away by 2025.
Customer service, receptionist, accounting, bookkeeping, sales, research and analysis, warehouse work, underwriting, and retail are the top industries set to be hit by automation first.
By the end of 2025, 65% of retail jobs are predicted to be replaced by automation.
Seeing the growth of GPTs in late 2021, it seemed natural to me that writing was going to be directly affected by the emergence of AI. And so in 2022 I made a bold move and sold my 100-person human writing agency.
Although AI can write, research, compile, and put together better content than a human could, a human still needs to drive the wheel and direct the ship. The key really is in knowing which AI tools to use for which job.
And if you’re in a job not using AI, chances are you still haven’t found the right AI tool yet.
The Two Sides of AI Economic Impact: Job Displacement vs. Job Creation
It’s undeniable that automation, driven by AI advancements, will displace certain job roles. Think routine tasks in manufacturing, customer service, and data entry — processes easily automated through AI. Large language models are also being used to automate more complex tasks such as software development and writing.
This potential for job displacement is understandably unsettling. But focusing solely on this aspect ignores AI’s role as a powerful engine for job creation. The emergence of new technologies often spawns entirely new industries and job roles we can’t even imagine yet. The internet and smartphone revolutions are recent testaments to this phenomenon.
Adaptability is Key
Instead of viewing AI as a job-stealing monster, perhaps a shift in perspective is needed. Think of AI as a collaborative force, enhancing our capabilities and augmenting human potential.
The question then becomes, how can we adapt and thrive in this AI-shaped future?
Lifelong learning, upskilling, and reskilling will be essential in navigating this shifting job landscape. As AI automates routine tasks, demand for skills requiring creativity, critical thinking, complex problem-solving, emotional intelligence, and strong interpersonal skills will surge. The ability to work effectively with AI systems will also become increasingly important.
The Rise of the Meaning Economy: Beyond the Paycheck
An intriguing possibility with AI’s rise is the potential emergence of a “meaning economy.” With AI handling many of today’s jobs, people can potentially pursue passions and engage in work not solely driven by financial necessity but by a sense of purpose and fulfillment. Think artistic endeavors, social entrepreneurship, and scientific research — fields often hampered by limited traditional employment opportunities.
A Collaborative Future: Decentralized Ownership in the Age of AI
The integration of AI requires careful consideration of its ethical and societal implications. For example, the training data used to train AI models can reflect existing biases, which can lead to unfair or discriminatory outcomes.
Decentralized ownership models, where profits from AI-driven automation are more equitably distributed among stakeholders (including workers), are being explored as potential solutions. This approach aims to ensure a fairer distribution of the economic benefits AI brings, mitigating potential societal disparities exacerbated by widespread automation.
Learn more about universal basic income, universal productivity dividend, and resource-based economy.
AI Economic Impact: A Glimpse into the Future
Predicting the economic impact of AI with absolute certainty is impossible, but one thing is certain: the world is changing. Technological advancements are disrupting industries at an unprecedented pace.
The future of work will look drastically different from today’s landscape. We will need flexibility, continuous learning, and a willingness to adapt.
How we manage these changes will define AI’s ultimate impact, determining whether we harness its potential for widespread benefit or exacerbate existing societal inequalities.
The economic impact of AI will be felt across all sectors of the economy. Some sectors, such as manufacturing and transportation, are already being transformed by AI.
At the same time, we still have a lot of obstacles to overcome in different industries, especially health and medical, that are roadblocking the use of AI in their systems.
We still need really good directors, managers, and C-suite people. Soft skills, high levels of emotional intelligence, being able to work well with each other, make good strategic decisions, collaborate well, and critically think — these are the skills that will go hand in hand with driving automation and human cooperation right now and in the next months and years.
Although AI could give our global economy a huge boost, the benefits of AI are not evenly distributed. Some countries and regions are better positioned to benefit from AI than others.
Brace Yourself for AI Economic Impact
The dawn of AI brings with it both unprecedented challenges and remarkable opportunities. As artificial intelligence increasingly integrates into our daily lives and economic structures, the conversation around its economic impact becomes increasingly critical.
While some aspects inspire hope and possibility, like the potential for new industries, job growth, and a “meaning economy”, the very real concerns about job displacement and economic inequality require careful consideration.
How we, as a global society, choose to respond will determine the trajectory of the future. By embracing lifelong learning, investing in human-centric skills, and promoting responsible AI development, we can harness the power of AI for the benefit of ALL humanity.
Business leaders will need to be proactive in adapting to the changes brought about by AI. This includes investing in AI technologies, developing new economic models that promote equitable distribution, addressing the ethical and societal implications of AI, and retraining workers for the jobs of the future.
