We will be debating AI job impact for quite some time, though the likely outcome is not so difficult to predict. Assuming AI represents a general-purpose technology, it absolutely will significantly rearrange the way work gets done in the economy.
But it likely also will be true that the job losses will be easy to quantify but relatively small in magnitude, while the job gains will be large in magnitude but more diffuse across the whole economy. A GPT tends to do that.
A general-purpose technology (GPT) is a technology that has broad applications across multiple industries, significantly enhances productivity, and serves as a foundation for further innovations. Think electricity, computing, steam power, the internet.
GPTs both create whole new categories of jobs even as they reduce the need for legacy work. So, yes, jobs will be reshaped and eliminated. But many new categories also will be created. And the magnitudes of job destruction and creation are likely to be asymmetrical.
The lost jobs might be easier to enumerate than the jobs created or sustained. To the extent AI affects jobs because of task automation, it will tend to be “quantitative” in impact: tasks might require fewer people than in the past.
But jobs created will happen for “qualitative” reasons: new things will be possible that were either technologically or economically “impossible” before. Ride hailing services were unthinkable before ubiquitous smartphone adoption, for example. So were all manner of location-based services, apps and use cases.
General-Purpose Technology (GPT) | Jobs That Shrunk | Jobs That Were Created |
Steam Engine (Industrial Revolution) | Artisans, Hand-weavers, Blacksmiths | Factory Workers, Mechanical Engineers, Railway Operators |
Electricity | Gas Lamp Lighters, Telegraph Operators | Electrical Engineers, Electricians, Radio Technicians |
Automobile | Horse Carriage Drivers, Blacksmiths (for horseshoes) | Auto Mechanics, Assembly Line Workers, Road Construction Workers |
Telecommunication (Telephone, Radio, TV) | Telegraph Operators, Messengers | Call Center Agents, Broadcast Technicians, Media Producers |
Computers & Automation (20th Century) | Typists, File Clerks, Switchboard Operators | Software Developers, IT Support Specialists, Data Analysts |
Internet & Digital Revolution | Print Journalists, Travel Agents, Retail Cashiers | Web Developers, Digital Marketers, E-commerce Specialists |
Artificial Intelligence & Robotics | Data Entry Clerks, Factory Line Workers, Customer Service Representatives (basic inquiries) | AI Specialists, Machine Learning Engineers, Automation Consultants |
Biotechnology & Genetic Engineering | Manual Lab Technicians in Some Fields | Bioinformatics Scientists, Genetic Counselors, Biotech Engineers |
The larger point might be the GPT impact on industry fortunes, as legacy industries often are replaced by newer industries that displace them.
General-Purpose Technology (GPT) | Industries That Shrunk | Industries That Were Created or Expanded |
Steam Engine (Industrial Revolution) | Cottage Textile Production, Manual Agriculture | Large-Scale Manufacturing, Railroads, Mining |
Electricity | Gas Lighting, Water-Powered Mills | Power Generation, Electrical Appliance Manufacturing, Telecommunications |
Automobile | Horse Carriage Manufacturing, Blacksmithing, Rail Passenger Transport (relative decline) | Auto Manufacturing, Oil & Gas, Road Infrastructure, Logistics |
Telecommunication (Telephone, Radio, TV) | Telegraph Services, Door-to-Door Messaging | Broadcasting, Call Centers, Advertising & Mass Media |
Computers & Automation (20th Century) | Typewriting & Clerical Work, Physical File Storage & Archiving | IT Services, Software Development, Cybersecurity |
Internet & Digital Revolution | Print Publishing, Traditional Retail Stores, Physical Banking Services | E-commerce, Social Media, Online Banking, Cloud Computing |
Artificial Intelligence & Robotics | Low-Skill Manufacturing, Data Entry Services, Basic Customer Support | AI Research & Development, Autonomous Vehicles, Personalized Healthcare |
Biotechnology & Genetic Engineering | Traditional Farming (relative decline), Some Chemical-Based Drug Development | Biopharmaceuticals, Genetic Medicine, Precision Agriculture |
At a wider level, studies of automation impact (among the likely ways AI will reshape jobs) suggest both job displacement and creation; job redefinition and emphasis on new skills.
Automation, by definition, is the use of technology, machinery, and software to perform tasks with minimal human intervention. So we replace human labor with machine labor. By clear implication, that means fewer jobs in the areas we automate, even as new jobs are created in other areas.
And GPTs have had a disproportionate impact on both job creation and destruction. Some GPTs create vastly more jobs than they displace, for example.
GPTs that enable new industries (such as electricity, computers, and the internet) tend to create the most jobs. On the other hand, many GPTs arguably displace relatively few jobs in relation to jobs they create.
Electricity displaced water-driven mills and gas lighting, but how many people actually worked in gas lighting or small water-powered mills, compared to the number of people whose work was enabled by electricity?
GPT job losses might be highly concentrated in a few areas, whereas the job gains might be widely distributed across an entire economy.
Title | Year Published | Publisher | Key Conclusions |
"Automation's Impact on Agriculture: Opportunities, Challenges, and Economic Effects" | 2024 | MDPI Robotics Journal | Explores the potential of automation and robotics in farming practices, discussing socio-economic effects and providing strategic recommendations. Highlights that while automation can enhance productivity and reduce labor costs, it may also lead to job displacement and requires careful implementation to balance benefits and social impacts. mdpi.com |
"Automation and Social Impacts: Winners and Losers" | 2023 | Food and Agriculture Organization (FAO) | Examines how labor-saving agricultural technologies affect employment and wages. Concludes that the impact of automation depends largely on market signals and the drivers behind farm automation, with potential benefits including increased efficiency and challenges such as labor displacement. openknowledge.fao.org |
"Trends Driving Automation on the Farm" | 2023 | McKinsey & Company | Discusses how automation can reduce the environmental impact of farming and help growers adapt to financial challenges posed by climate change. Emphasizes the spectrum of autonomous farming solutions, from semi-automated technologies to fully automated systems, and their potential to enhance productivity. mckinsey.com |
"The Impact of Automated Farming on the Agriculture Industry" | 2023 | Plug and Play Tech Center | Highlights that automation increases productivity and production rates, leading to reduced consumer costs. Notes improvements in labor efficiency and the potential for automation to address labor shortages in agriculture. plugandplaytechcenter.com |
"Automation, Climate Change, and the Future of Farm Work" | 2023 | National Center for Biotechnology Information (NCBI) | Explores the dual challenges of rapid automation and climate change on agricultural workers' safety and well-being. Suggests that while automation can mitigate some climate-related challenges, it also raises concerns about job security and the need for new skills among farm workers. pmc.ncbi.nlm.nih.gov |
"A New Study Measures the Actual Impact of Robots on Jobs. It's Significant" | 2017 | MIT Sloan School of Management | Found that for every robot added per 1,000 workers in the U.S., wages decline by 0.42% and the employment-to-population ratio decreases by 0.2 percentage points, equating to approximately 400,000 job losses. The impact is more pronounced in areas where robots are deployed, with one additional robot reducing employment by six workers in that area. mitsloan.mit.edu |
"The Impact of Automation on Manufacturing" | 2017 | Scott Technology | Discusses varying predictions regarding job losses due to automation, citing estimates ranging from 400 million to 800 million jobs worldwide by 2030. Highlights that while automation can lead to job displacement, it also enhances competitiveness and reduces production costs. scottautomation.com |
"Understanding the Impact of Automation on Workers, Jobs, and Wages" | 2020 | Brookings Institution | Argues that automation often creates as many jobs as it displaces over time. Workers collaborating with machines become more productive, leading to reduced costs and prices, increased consumer spending, and the creation of new jobs. brookings.edu |
"Technology and Jobs: A Systematic Literature Review" | 2022 | arXiv.org | Finds that while technological change can displace workers, compensating mechanisms often offset job losses. However, low-skill, production, and manufacturing workers have been adversely affected, emphasizing the need for effective upskilling and reskilling strategies. arxiv.org |
"Applications and Societal Implications of Artificial Intelligence in Manufacturing: A Systematic Review" | 2023 | arXiv.org | Explores AI applications in manufacturing, such as predictive maintenance and process control. Discusses uncertain societal implications, including workforce impact, job upskilling and deskilling, cybersecurity vulnerabilities, and environmental consequences. Emphasizes that beneficial AI integration depends on choices by stakeholders, including firms, technology developers, and governments. arxiv.org |
"Automation in Retail: An Executive Overview for Getting Ready" | 2019 | McKinsey & Company | Discusses how automation is reshaping retail business models and the broader value chain, leading to organizations with fewer layers and a better-trained workforce empowered by real-time data and analytics. Emphasizes the need for retailers to understand these implications and act swiftly to adapt. mckinsey.com |
"Retail Employment and Automation: Good or Bad for Jobs?" | 2020 | Digit Research | Explores the dual impact of labor-enhancing and labor-replacing technologies on retail employment. Highlights that while some lower-skilled jobs may be replaced, there is a simultaneous need to upskill staff to adapt to rapid technological changes. digit-research.org |
"Understanding the Impact of Automation on Workers, Jobs, and Wages" | 2020 | Brookings Institution | Examines the potential for automation to eliminate millions of jobs in sectors like retail. Discusses the balance between job displacement and the creation of new opportunities, emphasizing the importance of education and skill development to mitigate negative impacts. brookings.edu |
"Which Workers Are the Most Affected by Automation and What Could Help Them Get New Jobs" | 2021 | U.S. Government Accountability Office | Identifies that workers performing routine tasks, such as cashiers, are at higher risk of job loss due to automation. Estimates that 9% to 47% of jobs could be automated in the future, underscoring the need for retraining programs to assist displaced workers. gao.gov |
"The Future of Retail: How Automation is Revolutionizing the Industry" | 2023 | Scripted | Highlights that up to 65% of retail jobs could be automated by 2025 due to rising costs and wages, tight labor markets, and reduced consumer demand. Discusses the potential for job displacement and emphasizes the importance of strategic planning to address these challenges. script |
The point is that all the discussions we will keep having about job losses from AI will tend to outweigh the discussions of new jobs created, in large part because the losses will be highly concentrated and quantifiable, where the job gains will be highly distributed and often harder to quantify.
When one tries to understand jobs “created by electricity,” we often quantify only “jobs in the electricity production industry.” But that does not include all other jobs in the economy that are impossible without the use of electricity. And that arguably is nearly all jobs.
Another way of putting matters is that job losses will tend to be particular, while job gains will tend to be general.
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