Generative AI has already made a huge impact on how technology is used on a daily basis. Soon, it will disrupt the labour market, according to a Goldman Sachs report, and could replace 300 million jobs globally. The report predicts that about two-thirds of jobs in the US and Europe are exposed to AI automation.
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According to a new research report by GS economists, "The Potentially Large Effects of Artificial Intelligence on Economic Growth", 18% of work globally could be automated by AI, with larger effects in developed markets than in emerging markets. They also believe that AI could replace 7% of U.S. jobs.
Global Economics Analyst
The Potentially Large Effects of Artificial Intelligence on Economic Growth (Briggs/Kodnani)
26 March 2023 | 9:05PM EDT
The Potentially Large Effects of Artificial Intelligence on Economic Growth
The recent emergence of generative artificial intelligence (AI) has raised questions around whether we are at the brink of a rapid acceleration in task automation that will significantly save on labor costs, raise labor productivity, and increase the pace of economic growth. In this Global Economics Analyst, we provide an overview of AI’s potential macroeconomic impacts, and argue that if AI delivers on its promised capabilities, it has the potential to significantly disrupt labor markets and spur global productivity growth over the coming decades. Generative AI, Explained We first discuss the current state of AI development and its key capabilities. Exhibit 1 provides an overview of generative AI, in comparison to its predecessor machine learning methods, sometimes referred to as narrow or analytical AI. In our assessment, the generative AI technologies currently in focus, such as ChatGPT, DALL-E, and LaMDA, are distinguished by three main characteristics: 1) their generalized rather than specialized use cases, 2) their ability to generate novel, human-like output rather than merely describe or interpret existing information, and 3) their approachable interfaces that both understand and respond with natural language, images, audio, and video. The first two advances are key to expanding the set of tasks that AI can perform, while the third is key for determining its adoption timeline. Just as the migration from command line programming (e.g., MS-DOS) to graphical user interfaces (e.g., Windows) enabled the development of programs (e.g., Office) that brought the power of the personal computer to the masses, the intuitive interfaces of the current generation of AI technologies could significantly increase their speed of adoption. For example, ChatGPT surpassed 1mn users in just 5 days, the fastest that any company has ever reached this benchmark.
Jan Hatzius +1(212)902-0394 | jan.hatzius@gs.com Goldman Sachs & Co. LLC
Joseph Briggs +1(212)902-2163 | joseph.briggs@gs.com Goldman Sachs & Co. LLC
Devesh Kodnani +1(917)343-9216 | devesh.kodnani@gs.com Goldman Sachs & Co. LLC
Giovanni Pierdomenico +44(20)7051-6807 | giovanni.pierdomenico@gs.com Goldman Sachs International
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Generative AI set to affect 300 million jobs across major economies
Biz & IT / Information Technology
Technology could boost global GDP by 7% but also risks creating "significant disruption."
The latest breakthroughs in artificial intelligence could lead to the automation of a quarter of the work done in the US and eurozone, according to research by Goldman Sachs.
✓ The investment bank said on Monday that “generative” AI systems such as ChatGPT, which can create content that is indistinguishable from human output, could spark a productivity boom that would eventually raise annual global gross domestic product by 7 percent over a 10-year period.
✓ But if the technology lived up to its promise, it would also bring “significant disruption” to the labor market, exposing the equivalent of 300 million full-time workers across big economies to automation, according to Joseph Briggs and Devesh Kodnani, the paper’s authors. Lawyers and administrative staff would be among those at greatest risk of becoming redundant.
They calculate that roughly two-thirds of jobs in the US and Europe are exposed to some degree of AI automation, based on data on the tasks typically performed in thousands of occupations...
...In the US, this should apply to 63 percent of the workforce, they calculated. A further 30 percent working in physical or outdoor jobs would be unaffected, although their work might be susceptible to other forms of automation.
But about 7 percent of US workers are in jobs where at least half of their tasks could be done by generative AI and are vulnerable to replacement.
Goldman said its research pointed to a similar impact in Europe. At a global level, since manual jobs are a bigger share of employment in the developing world, it estimates about a fifth of work could be done by AI—or about 300 million full-time jobs across big economies.
The report will stoke debate over the potential of AI technologies both to revive the rich world’s flagging productivity growth and to create a new class of dispossessed white-collar workers, who risk suffering a similar fate to that of manufacturing workers in the 1980s.
Goldman’s estimates of the impact are more conservative than those of some academic we studies, which included the effects of a wider range of related technologies..."
In Sudden Alarm, Tech Doyens Call for a Pause on ChatG inPT
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An open letter signed by hundreds of prominent artificial intelligence experts, tech entrepreneurs, and scientists calls for a pause on the development and testing of AI technologies more powerful than OpenAI’s language model GPT-4 so that the risks it may pose can be properly studied.
It warns that language models like GPT-4 can already compete with humans at a growing range of tasks and could be used to automate jobs and spread misinformation. The letter also raises the distant prospect of AI systems that could replace humans and remake civilization.
“We call on all AI labs to immediately pause for at least 6 months the training of AI systems more powerful than GPT-4 (including the currently-being-trained GPT-5),” states the letter, whose signatories include Yoshua Bengio, a professor at the University of Montreal considered a pioneer of modern AI, historian Yuval Noah Harari, Skype cofounder Jaan Tallinn, and Twitter CEO Elon Musk.
The letter, which was written by the Future of Life Institute, an organization focused on technological risks to humanity, adds that the pause should be “public and verifiable,” and should involve all those working on advanced AI models like GPT-4. It does not suggest how a halt on development could be verified, but adds that “if such a pause cannot be enacted quickly, governments should step in and institute a moratorium,” something that seems unlikely to happen within six months.
OpenAI, Microsoft, and Google did not respond to requests for comment on the letter. The signatories seemingly include people from numerous tech companies that are building advanced language models, including Microsoft and Google.
The letter comes as AI systems make increasingly bold and impressive leaps. GPT-4 was only announced two weeks ago, but its capabilities have stirred up considerable enthusiasm and a fair amount of concern. The language model, which is available via ChatGPT, OpenAI’s popular chatbot, scores highly on many academic tests, and can correctly solve tricky questions that are generally thought to require more advanced intelligence than AI systems have previously demonstrated. Yet GPT-4 also makes plenty of trivial, logical mistakes. And, like its predecessors, it sometimes “hallucinates” incorrect information, betrays ingrained societal biases, and can be prompted to say hateful or potentially harmful things.
Part of the concern expressed by the signatories of the letter is that OpenAI, Microsoft, and Google, have begun a profit-driven race to develop and release new AI models as quickly as possible. At such pace, the letter argues, developments are happening faster than society and regulators can come to terms with.
The pace of change—and scale of investment—is significant. Microsoft has poured $10 billion into OpenAI and is using its AI in its search engine Bing as well as other applications. Although Google developed some of the AI needed to build GPT-4, and previously created powerful language models of its own, until this year it chose not to release them due to ethical concerns.
But excitement around ChatGPT and Microsoft’s maneuvers in search appear to have pushed Google into rushing its own plans. The company recently debuted Bard, a competitor to ChatGPT, and it has made a language model called PaLM, which is similar to OpenAI’s offerings, available through an API.
Experts claim AI set to eliminate 300 million jobs
AI has already ushered in several changes in industries such as travel and tourism.
Recent advances in technology have taken the world by storm, with companies launching their own versions of artificial intelligence apps for different tasks. The trend has also given rise to fears that AI may eventually replace humans in several spheres, making them ineligible for work in certain sectors.
Now a report by a leading global investment banking firm, Goldman Sachs, has revealed that AI could impact two-thirds of the jobs in the US and the European Union.
"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," read an excerpt from the report.
"Extrapolating our estimates globally suggests that generative AI could expose the equivalent of 300 million full-time jobs to automation," it adds.
The report further stated that automation will also help economies develop faster, as the adoption of AI could increase the total value of goods and services created worldwide by 7% in the next 10 years.
"The large share of employment exposed to automation from generative AI raises the potential for a boom in labour productivity that significantly increases global output," read the report.
It added that AI will also be able to help create more opportunities and, at the same time, complement some jobs.
The report went on to highlight the areas where the disruption will be the least and the fields that will be most affected by it. Administrative and legal positions are at the greatest risk of task replacement, while physically intensive jobs such as maintenance and construction are at lower risk.
It also highlighted how eventually people replaced by AI would be able to get new work opportunities, thereby, increasing the total output of a country.
"We anticipate that many workers that are displaced by AI automation will eventually become reemployed—and therefore boost total output—in new occupations that emerge either directly from AI adoption or in response to the higher level of aggregate and labour demand generated by the productivity boost from non-displaced workers," it added.
The report comes at a time when the world is debating whether AI can replace humans in specific vocations. There is a lot of hype surrounding the latest innovations by tech firms such as Microsoft and Google.
The development of chatbots such as ChatGPT has made companies rethink the way they function. A poll conducted by Resumebuilder.com revealed that nearly half of the US-based businesses have already started using ChatGPT in their company.
AI has already ushered in several changes in industries such as travel and tourism. People can now book flights, restaurants, and hotels with the help of these chatbots. These apps work as virtual assistants and have replaced travel agents.
Airports are also using these AI apps to assist flyers. London's Heathrow Airport uses robots to help passengers find terminals. A report published by Vero Solutions revealed that robots may replace humans in the check-in process by 2030.
It is being used by businesses and companies to gather and interpret data to provide better services to their customers and use this data to make better business strategies. The development of Microsoft's ChatGPT, Google's Bard, and Notion Labs Inc.'s Notion AI has shaken the tech sector.
More than 1,100 eminent persons, including Twitter CEO Elon Musk, Apple co-founder Steve Wozniak, and Tristan Harris of the Centre for Humane Technology, have signed an open letter calling for a 6-month pause "on the training of AI systems more powerful than GPT-4."
The letter calls for proper planning and management before AI is let loose completely. "Should we develop nonhuman minds that might eventually outnumber, outsmart, obsolete and replace us? Should we risk loss of control of our civilization? Such decisions must not be delegated to unelected tech leaders," reads the letter.
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