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The effects of AI on the employment (Risks and opportunities)





This post is part 2/2 of a research paper I wrote for school. I have divided the paper into two parts, the first focusing on how AI affects education, the second focusing on how AI affects employment, the economy and the opportunities/risks associated with it.

I instead wrote the footnotes in brackets, like this: [#]. The list of footnotes is at the bottom. The full list of citations (and links) are at the end of this post. I have used the German citation style for this paper.


4 The Impact of AI on the Working World

It is undisputed that AI will change the working world more significantly and rapidly than any previous technological developments. Although AI is uncharted territory for many companies, AI systems are already in use today, primarily in mobile applications (apps) [22]. However, their application is not limited to just that. AI solutions like chatbots are employed in customer service [23], healthcare [24], e-commerce (shopping) [25], and the selection of financial service products [26].

Several major companies already offer AI solutions. Consumers may not always recognize this, but Alexa, Siri, Cortana, or Watson, to name just a few, are based on AI [27].

The aforementioned solutions enhance the products and services of companies, while the new generation of AI is changing the development and production processes. The following will examine these processes and their impact on the professional world in more detail.


4.1 Optimized or Replaced by AI?

Residents of the Kalahari Desert need time to realize that the drought period is over. Then life awakens, and everything blooms and thrives [28]. The introduction of ChatGPT has had the opposite effect on many people over time. While the initial enthusiasm for AI was almost euphoric, the majority is now more sceptical about whether this technology will truly have a positive impact on their lives. In the public eye, there is a prevailing debate about whether AI is a curse or a blessing. Many people wonder if artificial intelligence will one day replace them and make them unemployed [29].

Although it may appear that only employees are concerned, this is not the case. Companies are also asking the same question, albeit on a different scale. At first glance, this may seem contradictory, but upon closer examination, the enormous impact becomes clear. With AI, a much smaller company could offer services and products in certain areas that were previously provided only by medium-sized or large companies. The best example is the introduction of ChatGPT, which already seems to undermine Google's market power today [30].

In a market economy, market conditions determine everything. Companies and employees offer their services, products, and labour at market conditions because they are in competition with other companies and employees. There are conditions, whether physical or intellectual, that apply to all market participants. These conditions include working hours, holiday and sick leave, as well as wages and salaries, which vary depending on the workplace (country) and expertise (know-how and experience). In short, the conditions influence market conditions.

However, these conditions are obsolete for machines. There are no limitations on working hours or restrictions on reproduction. AI can be in continuous operation and continuously evolve. When the capacity of AI reaches a certain limit, it can be increased through reproduction or expansion (hardware or software upgrades). Monitoring this and taking the necessary steps when required can also be managed by AI [31].

It's worth mentioning that this analysis initially excludes manual labour providers. AI can and will support craftsmen in making the right decisions and assist them in their daily work. However, the actual execution of the work remains with humans because the costs for equivalent flexibility with AI would increase disproportionately.

Therefore, the focus is on service companies and research institutions (research and development).


4.2 Risk

To understand the fears and concerns of companies and employees, we must examine work itself. Work can take on various forms. There are physical labourers (construction workers), mental labourers (financial service providers), and a combination of both (surgeons). All forms of work are based on knowledge (information). Without the right information, the right background, and the potential correlations that may arise from them, work cannot be successfully performed.

Having a closer look at mental work, the activity is characterized by the fact that we learn as we go, engaging in trial and error. The ability to use existing knowledge to generate new knowledge is what defines the uniqueness of humans. With artificial intelligence (AI), biological intelligence (BI) now has a real competitor. The sinister aspect of this new competition is that AI can be optimized, duplicated, and scaled for each requirement in isolation. While humans utilize a specific part of their brain capacity for living and surviving, AI can focus 100% on a specific task, problem, or challenge.

"AI only relies on existing knowledge..." is one of the main arguments against the potential of AI. Unfortunately, this also applies to humans (BI), except partially in the fields of research and development. Humans also rely on existing knowledge, such as search engines [32]. The knowledge that AI cannot access is the experiential knowledge that is not documented or digitized.

Knowledge is built through work, but in itself, it is not work; it is merely an accumulation of information that is transformed into work by its possessor. Knowing what government bonds are is good, but in isolation, it does not distinguish a financial service provider. It is the combination of the current market situation with a forecast and the timely entry that makes the financial service provider a service provider. Now, if a decision needs to be made for an investment, the "intelligent" systems must compile all the information, compare dependencies, conduct a risk assessment, and list the options in order of priority. This example illustrates that AI can either assist the financial service provider in their work or completely take over their work – in other words, potentially render them obsolete. If financial service providers become obsolete, should banks then replace this sector entirely with AI and lay off all their employees? If a company exclusively offers financial services, should it abandon its business field?


4.3 Opportunity

As with all other things, the introduction of AI doesn't come in just black and white. Let's analyse the spectrum more closely.

The statement that progress destroys existing jobs and creates new ones has consistently proven true in the past [33]. Every new technological advancement has compelled existing markets to reinvent themselves and has additionally created new markets. Shoes and clothing have always been sold through retail. The e-commerce platform Amazon didn't create a new market; instead, it modernized an existing market through the technology of the internet. For example, the internet has given rise to new professions such as web designers and IT specialists. To deliver products to customers more quickly, more warehouse workers and logisticians were needed, to name a few. Both businesses and institutions have created training and educational opportunities to fill this market with specialists. An entirely new and highly successful market was created.

The key to the success of the internet was time. Companies, employees, and consumers often overlook it, but the success of the internet, particularly through mobile devices, has become apparent. While the internet was initially just a "tool for work", it has evolved into a significant part of life with smartphones, tablets, and apps.

Now, it is a legitimate question to ask whether humanity has the same amount of time for the introduction of AI, or if AI will overrun markets, businesses, and employees.

To answer this question, we must also consider the development of people. AI is the result of the IT development of the past decades. However, during this period, people have also evolved. People are proficient in the digital medium and can adapt relatively quickly. Furthermore, it must be considered that the integration of AI into existing systems can only happen gradually, not with the push of a button. With the gradual integration of AI, new markets, products, and services will emerge, just as it did with the introduction of the internet.

However, this transformation will occur in a much shorter time frame than in the past. Companies and employees will need to readjust their job contents in a much shorter period. This pace will continuously increase over time, which is why professions and associated tasks and responsibilities will also change much faster. This, in turn, will have an impact on education.

But with the introduction of AI, there are also significant opportunities. Opportunities that can be realized in the short term and opportunities that are more societal and socio-economic in nature, requiring long-term consideration.

In the short term, if people are given the freedom, they can rearrange their job contents. Monotonous and boring tasks can be taken over by AI. As a result, employees can focus much more on creative and abstract content. "Bullshit Jobs", [34] as described in David Graeber's book, could become a thing of the past, allowing people to concentrate on what is essential and important. As mentioned earlier, both employees and companies must adapt to the new circumstances. Continuing with business as usual is not an option for either side. This presents a significant opportunity if humanity recognizes and seizes it.

 

5 Conclusion

Darwin described variation and selection as fundamental principles of life in his theory of evolution. He assumed that in the struggle for food and habitat, only those who are best adapted to their environment can survive [35].

AI is the logical continuation of technical evolution. Integrating this evolution into societal life is the challenge that humanity will and must face.

The significant interest in artificial intelligence shows that human biological intelligence is becoming increasingly adaptable in shorter time frames. Over the past 20 years, the internet, mobile devices, new forms of socialization, and participation in social life (Twitter, Facebook, Instagram, TikTok) have elevated people, especially young people, to a new level of evolution.

Technological progress, like all progress, brings both joy and sorrow. Learners are excited about the new possibilities. Homework and assignments can be completed more efficiently and accurately. Educators may be frustrated that their methods need to be adapted. Some companies are thrilled about the opportunity to generate more with fewer resources, while others are upset that their visions for the future are already outdated. Opportunities and risks abound everywhere you look.

The use of AI will have a very positive impact on education. For the professional world, it remains important to strike a good balance between biological and artificial intelligence. Ultimately, all achievements, products, and services are intended for people and not for AI.

However, perhaps the most significant evolution will be societal. Who knows, maybe every person will receive a "Data" and humanity will no longer yearn for wealth and transient things but instead embark on a journey to explore new worlds, discover new life, and build new civilizations, much like in the series "Star Trek - The Next Generation" (TNG).


Footnotes:

22 Tilly Kenyon, 2021

23 Jon Walker, 2019

24 Alvin Powell, 2020

25 Nick Heethuis, 2022

26 Deloitte, 2019

27 Alex McFarland, 2023

28 George Bertrand Silberbauer, Richard F. Logan, 2023

29 Oscar Liu, 2023

30 Will Douglass Heaven, 2023

31 David De Cremer, Garry Kasparov, 2021

32 Arthur Miller, 2019

33 Adam Saunders, Technology’s Impact on Growth and Employment

34 David Graeber, 2018

35 ARD, 2022


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