Generative AI promises major workforce impacts, study suggests

Generative AI Promises Major Workforce Impacts, Study Suggests

London, UK – The burgeoning landscape of artificial intelligence (AI) continues to oscillate between promises of revolutionising industries and concerns over its socio-economic ramifications. A recent study by consultancy firm Sia Partners has projected that generative AI (GenAI) could dramatically alter the nature of various professions, potentially leading to significant job reductions, particularly within back-office environments.

The study undertook a comprehensive analysis of 1,000 tasks across 50 different occupations including sectors such as hospitality, healthcare, engineering, manufacturing, legal, education, finance, and the creative industries. The findings indicate that although GenAI will impact a wide array of roles, the extent of this impact will differ substantially.

For the majority, around 79% of occupations, only about one-tenth of tasks will likely be influenced by GenAI technologies. These changes are predominantly expected to ‘accelerate’ existing tasks rather than eliminate positions outright, thus minimising job losses in these sectors. Surprisingly, a large portion of daily functions could potentially be enhanced without causing immediate job displacement.

Conversely, the report paints a less optimistic picture for approximately 28% of occupations, where up to 80% or more of tasks could be susceptible to automation through GenAI. This segment includes roles in tax, web administration, IT, and digital design, which are identified as being particularly ‘heavily exposed’. The resultant automation could lead to a reduction in workforce numbers as companies aim to optimise operational efficiency and cut costs.

Yet, it appears the transition to an AI-dominated work environment is not imminent. Despite the excitement surrounding AI’s capabilities, Andrei Pascanean, senior consultant in data science at Sia Partners, highlighted that many businesses have yet to develop effective strategies for upskilling or reskilling their employees to be AI-ready. “The key insights of this study highlight the transformative potential of GenAI, demonstrating the benefits it offers and the challenges it poses, while emphasising the need for strategic planning and thoughtful implementation,” Pascanean noted.

The enthusiasm for AI’s transformative potential is waning somewhat, as practical issues such as the technology’s propensity for ‘hallucinations’—errors or inaccuracies—persist. This scepticism is exacerbated by the considerable costs involved in AI integration without commensurate gains in productivity. For instance, The Information recently reported that adoption rates for Microsoft’s AI-powered “Copilot” functionalities in its 365 suite are minimal, with only 0.1% to 1% uptake among its 440 million users. This illustrates a prevailing uncertainty about the ROI (return on investment) offered by these advanced tools.

Amid the growing scepticism, some companies are already making tangible decisions, such as cutting back-office functions and promoting their nascent AI capabilities to fill the void. Nonetheless, few organisations appear to be genuinely utilising AI to perform the eliminated tasks. An emerging pattern shows that rather than relying on AI, these jobs are being outsourced to more affordable labour markets—a practice well entrenched in the framework of global capitalism.

This approach does not align with the ‘revolutionary’ perception often attributed to AI but instead follows a historical trend of using economic measures to manage labour costs. Meanwhile, market fluctuations and financial challenges pose significant hurdles to the further development and refinement needed for GenAI to fully deliver on its high expectations.

In summary, while GenAI harbours the potential to transform specific aspects of various professions, significant hurdles remain. The actualisation of this technology’s promise involves not only overcoming technical issues and reducing costs but also navigating complex socio-economic landscapes. As this unfolds, the broader implications for the workforce and the business community continue to be a subject of intense scrutiny.

Source: Noah Wire Services