Monday, May 29, 2023 | 08:25 pm

According to Goldman Sachs, AI-Driven Automation May Affect Two Thirds of US Jobs

According to Goldman Sachs, AI-Driven Automation May Affect Two Thirds of US Jobs

Breakthroughs in generative artificial intelligence technologies could expose about two-thirds of U.S. jobs to some level of automation, according to a report by Goldman Sachs economists.

Generative artificial intelligence (AI) is a technology that can synthesize data and produce audio, imagery and text. It uses tools like deep learning algorithms and neural networks to identify patterns and structures in existing data that it then uses to generate new, original content.

“Despite significant uncertainty around the potential for generative AI, its ability to generate content that is indistinguishable from human-created output and to break down communication barriers between humans and machines reflects a major advance with potentially large macroeconomic effect,” Goldman Sachs economists Joseph Briggs and Devesh Kodnani wrote in a report.

The two economists analyzed databases that contained information about the type of tasks performed by people in over 900 different occupations and estimated that about two-thirds of U.S. occupations are exposed to some degree of automation by AI technology.

Of those occupations that are exposed to AI-driven automation, roughly a quarter to one-half of their workload could be replaced by AI. However, the authors noted that increased automation wouldn’t necessarily lead to layoffs.

Although the impact of AI on the labor market is likely to be significant, most jobs and industries are only partially exposed to automation and are thus more likely to be complemented rather than substituted by AI,the authors wrote.

The degree to which AI is adopted and how advanced AI technologies become creates some variability in how it ultimately impacts the economy through increased productivity, the displacement of labor, and re-employment of displaced labor per the Goldman Sachs report.

Under the report’s baseline, the authors estimated a net increase of about 1.5 percentage points over 10 years. That includes an increase in the productivity of non-displaced workers of about 1.1 percentage points and higher productivity due to labor displacement of 0.46 percentage points, which would be partially offset by the re-employment of displaced workers amounting to 0.11 percentage points over 10 years.

The researchers also analyzed a scenario with a much more powerful AI that found a net increase in productivity of over 2.9 percentage points over 10 years. That scenario saw productivity for non-displaced workers increase by 2.19 percentage points and labor displacement add another 0.96 percentage points, while re-employment of displaced workers offset that by 0.22 percentage points.

Historically, innovation cycles centered on automation and other technological advances that disrupt labor markets tend to be offset due to the creation of new jobs. The report notes how the rise of information technology created new occupations like webpage designers, software developers and digital marketers.

The report also cited a study by economist David Autor, who found that about 60% of workers today are employed in occupations that didn’t exist in 1940. The Goldman Sachs economists say that study implies that over 85% of employment growth in the last 80 years has been driven by technological innovations that lead to the creation of new occupations.