Our way of working is constantly being transformed by megatrends. However, AI differs from other technologies in that it encompasses, in principle, all occupational fields. So how can the negative and positive predictions about the impact of AI on the labor market be examined? And how can we adapt to the far-reaching application of AI? ...
Similar to the invention of the computer and the internet, artificial intelligence (AI) is transforming the way we work. However, AI differs from other world-changing technologies in its scope, which basically covers more or less all professional fields, its enormous speed of development and the wide variety of tasks it can take over from humans (OECD, 2023).
The development of AI is seen as controversial and while, for example, 63% of participants in the OECD survey (2023) feel more satisfied in their work thanks to the use of AI, 60% are worried that they may lose their jobs as a result. In this article, we want to shed light on both the negative and positive predictions about the impact of AI on the labor market and talk about how to deal with it.
Low-skilled jobs are currently described as the jobs most at risk of being replaced by AI. This is because AI can perform standardized and repetitive tasks much faster and more efficiently than humans. However, the new studies in the field of AI show the technology’s progress in performing more complex cognitive tasks, such as problem solving, logical thinking, data processing and other activities that normally require academic training. It is also remarkable how quickly artificial intelligence is advancing. Whereas six years ago it was capable of playing simple computer games, today AI can beat a human at the complex strategic game of “Diplomacy”, which requires skills in persuasion, negotiation and planning. This means that even highly skilled workers are exposed to AI-related risks (OECD, 2023).
The elimination of various jobs is seen as the biggest risk of widespread AI application. However, this will not necessarily happen suddenly. It is more likely to happen through a gradual change in tasks, roles and qualifications. In addition, a more intensive working environment may arise in which more performance is expected from employees, which will subsequently have an impact on well-being and job satisfaction (Broecke, 2023).
Despite the risks, however, there are still tasks that AI cannot successfully handle. These include management tasks or social interactions, for example. Furthermore, there is hardly any evidence that the use of AI has a negative impact on the labor market. The results of several studies find no statistically significant decline in the number of employees as a result of AI. In addition, there is generally not much data that could be accessed, as the use of AI in companies is still relatively low (OECD, 2023). The reasons for this tend to be high implementation costs and a lack of required AI skills. According to McKinsey’s survey (2023), only 21% of the companies surveyed have developed the guidelines for the internal use of AI and are thus ready for its further spread. Therefore, possible negative effects of AI still need time to show themselves (Broecke, 2023).
One of the main barriers to the introduction of technology, as already mentioned, is the lack of AI skills. According to the OECD (2023) survey, every second company surveyed pointed this out. Although AI can replace several human skills, new skills are required to maintain and handle the technology. This requires basic knowledge of digital and data science as well as specific AI skills. As the topic of AI is not yet widely integrated into education systems, vocational training plays a major role in this area. Companies could provide a great deal of support in this area and ensure on-the-job training for employees (OECD, 2023).
At WARGITSCH Transformation Engineers, for example, the use of AI is actively promoted and training on the topic of AI was provided for all employees to increase its effectiveness. The trainers presented a selection of AI applications that can be used in day-to-day consulting and raised awareness of how to avoid legal and ethical risks when using AI. The transformation engineers also had the opportunity to deepen their new knowledge through practical exercises.
Ideally, additional training in AI should also be supported by formal measures to equip people with the necessary skills for the future (OECD, 2023). As emphasized in the study by McKinsey (2023), many jobs will most likely not be abolished, but reshaped by AI. Continuing education and training will play an important role in preventing job losses.
Ideally, additional training in AI should also be supported by formal measures to equip people with the necessary skills for the future (OECD, 2023). As emphasized in the study by McKinsey (2023), many jobs will most likely not be abolished, but reshaped by AI. Continuing education and training will play an important role in preventing job losses.
Apart from risks, AI also brings many positive aspects. According to the OEDC survey (2023), AI can reduce tiring and dangerous tasks and thus create a safer working environment. Thanks to AI taking over repetitive tasks, employees feel much more productive and can use the time gained for more creative and complex tasks (Broecke, 2023). Despite fears about the potential elimination of jobs, AI is also creating new tasks and jobs that can already be seen on the labor market. For example, in the fields of statistics and software engineering (Green, 2023).
In summary, the impact of AI on the labor market can be grouped into three main effects (Green 2023):
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Displacement Effect: AI will take over some tasks from humans
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Productivity Effect: AI will increase the demand for labor due to increased productivity
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Reinstatement Effect: AI will change tasks and create new tasks and jobs
Training and continuous professional development are decisive factors in preventing the negative effects and exploiting and benefiting from the positive potential of AI.
Sources:
- Broecke, Stijn (2023): “Artificial intelligence and the labour market: Introduction.” In: OECD Employment Outlook 2023.
- Green, Andrew (2023): “Artificial intelligence and jobs: No signs of slowing labour demand (yet).” In: OECD Employment Outlook 2023.
- McKinsey (2023): “The state of AI in 2023: Generative AI’s breakout year.”