Goldman Sachs has released a new report titled, The Potentially Large Effects of Artificial Intelligence on Economic Growth, which provides an in-depth analysis of the potential impact of AI on the global job market.
Why it matters:
The report suggests that generative AI, a form of artificial intelligence capable of creating content indistinguishable from human output, could potentially disrupt the labor market significantly. It estimates that roughly two-thirds of current jobs are exposed to some degree of AI automation, and generative AI could substitute up to one-fourth of current work. This extrapolates to the equivalent of 300 million full-time jobs globally being exposed to automation.
But, but, but:
The report also highlights that historically, worker displacement from automation has been offset by the creation of new jobs. Technological innovations have led to the emergence of new occupations, accounting for the vast majority of long-run employment growth.
The big picture:
The report suggests that the combination of significant labor cost savings, new job creation, and higher productivity for non-displaced workers could potentially lead to a productivity boom, significantly increasing economic growth. It estimates that generative AI could raise annual US labor productivity growth by just under 1½ percentage points over a 10-year period following widespread adoption.
What’s next:
The boost to global labor productivity could also be economically significant. The report estimates that AI could eventually increase annual global GDP by 7%. However, the actual impact of AI on jobs could vary depending on various factors, including the pace of AI development and adoption, regulatory responses, and the economy’s ability to create new jobs.