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The AI Job Loss Myth: History Shows Progress, Not Peril
The AI Job Loss Myth: History Shows Progress, Not Peril

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Artificial intelligence (AI) is everywhere these days, from giving you answers to all your questions to chatbots handling customer service to self-driving cars. But with this newfound ally to the human race comes a familiar fear: Job Loss and replacement of humans with machines.

However, a closer look at history reveals a more nuanced story, one where new inventions initially displace some jobs but ultimately create new opportunities.

This isn't the first time a new breakthrough invention getting embedded into the society and creating significant impact has sparked such anxieties. The Iron Age saw tools replace manual labor, the Industrial Revolution brought assembly lines further diminishing the need for manual workers and over the past century inventions such as the Tractor, Automobile, Airplane, Typewriter, Television, Computer etc. have all led to a part of the human workforce losing their jobs.

The key is that these advancements weren't harbingers of mass unemployment. People adapted, reskilled themselves and found new ways to contribute. The same will be true with AI. Yes, some jobs will likely become less relevant as AI becomes more sophisticated. Writers, Graphic Designers, Customer Service Associates, Research Analysts and possibly even Coders may see a shift in the types of work they do. But rather than a dead end, this presents an opportunity to enhance their value.

Consider Customer Service. Chatbots could handle routine inquiries, freeing human representatives for complex problems. This not only improves efficiency but also allows the business to grow, creating a larger economy with hopefully, even better jobs. AI can handle repetitive tasks, freeing humans to focus on complex problem-solving, creativity and tasks requiring social interaction and intervention.

AI's true impact lies in its ability to boost productivity and growth. Imagine streamlined business operations, improved accuracy in tasks and the ability to automate repetitive processes. This frees up human capital for more creative, strategic endeavors.

This optimistic viewpoint is supported by the concept of the three effects of new inventions on labor:

  • Displacement effect: Jobs are lost due to the automation the new invention introduces
  • Productivity effect: Businesses become more efficient with the introduced efficiency and the economy grows
  • Reinstatement effect: New jobs are created with the growth in the economy especially in sectors where the new invention has introduced an advantage.

We have seen the "Reinstatement effect" repeat from time to time in human evolution and introduce new jobs post every invention leading to greater growth. This isn't just theory; the World Economic Forum predicts that while AI may eliminate 85 million jobs globally by 2025, it will also create 97 million new ones!

There will be bumps along the road of course. Some people will find it harder to adapt than others. But history shows that progress, not peril, is the inevitable outcome. AI is an engine for growth, but it requires a skilled workforce to navigate it. By focusing on reskilling and education, we can ensure the human element remains a vital part of the equation. The future of work may look different, but with the right approach, it can be a future of opportunity for all.

 


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Sidharth Sivasailam
Head of Product Strategy and Management

Product and Technology Leader

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