When millennials hear ‘AI’ their first worry is about them losing their job. But if you ask a Gen Z for their opinion on the same they will say quite the opposite such as AI is extremely 'efficient'.
Efficiency means producing more with less—but if the “less” in that process is “less labour,” then what does it mean for us, are companies going to layoff more of their employees, will robots be ruling over humans — such is the current situational fear that has been engraved in many people’s thoughts.
The fear of job loss is quite widespread; For example, the ongoing protest by screenwriters and actors in the United States are now demanding an assurance that AI will not replace them. To some extent, as humans are known to produce unique and creative content.
But in a study titled 'What happens when AI takes over?' Chief Economist, UBS GWM, Paul Donovan says that AI will require trained people to ask the right questions, along with computers to be manufactured for AI to run on.
At the same time, the transition may not be entirely painless. Donovan explains how AI's efficiency can also create new jobs as things become cheaper to do, since technological change just like AI is revolutionary. However, the impact that it has on society will also disrupt the labour market indirectly through changing patterns in demand.
"At a macroeconomic level, AI is unlikely to create mass unemployment in the long term. Existing jobs are destroyed, new jobs are created, and some jobs that already exist will grow in number. The problem is that this balance is only likely to occur in the long term—and in the short term, the imbalances of the labour market may be more painful," he says in the study.
However, he pointed out that the key to the ‘pain factor’ will be the speed of adoption. Like in the case of the internet, which took time to change the economy as it required a critical mass of consumers using it.
He points out that a slower pace of change would allow older workers to gradually retire out of the workforce, while new entrants will only know the new way of working.
On the other hand, rapid change increases the risk of what economists call “frictional unemployment,” where people are unable or unwilling to retrain for new jobs.
“The biggest potential difference arising from AI is the speed with which disruption is likely to take place. As people, politicians, and economic institutions have less time to adapt, the "friction" of change is likely to burn,” Paul adds.
Though the application of AI technology is likely to promote efficiency, there is also a very clear risk that the reaction to AI technology may deliberately add inefficiencies into the economy. These inefficiencies would work to slow growth in some sectors. "Policy reactions could seek to limit the use of AI in the belief that this will preserve employment in the short term," he said.