So says the always humanist and caring Goldman Sachs.
The recent emergence of generative artificial intelligence (AI) raises whether we are on the brink of a rapid acceleration in task automation that will drive labor cost savings and raise productivity. Despite significant uncertainty around the potential of generative AI, its ability to generate content that is indistinguishable from human-created output and to break down communication barriers between humans and machines reflects a major advancement with potentially large macroeconomic effects.
If generative AI delivers on its promised capabilities, the labor market could face significant disruption. Using data on occupational tasks in both the US and Europe, we find that roughly two-thirds of current jobs are exposed to some degree of AI automation, and that generative AI could substitute up to one-fourth of current work. Extrapolating our estimates globally suggests that generative AI could expose the equivalent of 300mn full-time jobs to automation.
The good news is that worker displacement from automation has historically been offset by creation of new jobs, and the emergence of new occupations following technological innovations accounts for the vast majority of long-run employment growth. The combination of significant labor cost savings, new job creation, and higher productivity for non-displaced workers raises the possibility of a productivity boom that raises economic growth substantially, although the timing of such a boom is hard to predict.
We estimate that generative AI could raise annual US labor productivity growth by just under 1½pp over a 10-year period following widespread adoption, although the boost to labor productivity growth could be much smaller or larger depending on the difficulty level of tasks AI will be able to perform and how many jobs are ultimately automated.
The boost to global labor productivity could also be economically significant, and we estimate that AI could eventually increase annual global GDP by 7%.
Although the impact of AI will ultimately depend on its capability and adoption timeline, this estimate highlights the enormous economic potential of generative AI if it delivers on its promise.
OK, so, in theory, I agree that this will be a good thing. However, that comes without very large caveats:
- The income dividend of higher productivity must be shared between workers and capital. That will almost certainly not happen under the current political economy regime. Hence the need for robot taxes and redistribution.
- The displaced labour must be retrained and upskilled not left to rot. That will almost certainly not happen under the current political economy regime of mass immigration. Hence the need for managed borders.
If these two conditions are not addressed then AI will be a disaster for low-income workers. Doubtless, Australia’s multi-millions cohort of such will be ignored for a handful of trans scandals.
But, globally, it is the stuff of revolutions.
