Goldman Sachs: AI To Slash Jobs But Boost GDP
- By CDOTrends editors
- May 24, 2023
According to a new report from global investment bank Goldman Sachs, around 300 million jobs could be lost or diminished through the implementation of artificial intelligence, and two-thirds of all occupations will become partially automated.
At the same time, however, AI will create new types of jobs and cost savings and drive an annual increase of 7% in global GDP, equivalent to USD7 trillion, according to a Goldman Sachs Research unit report.
“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 advancement with potentially large macroeconomic effects,” Goldman Sachs economists Joseph Briggs and Devesh Kodnani write in the report.
The authors say that in those industries most exposed to AI, as much as half of their workload could be replaced.
But not all that automated work will translate into layoffs, the report says.
“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 write.
They note that the creation of new jobs has historically offset jobs displaced by automation, and the emergence of new occupations following technological innovations accounts for most of the long-run employment growth, according to the report.
The report quotes a recent study by economist David Autor which found that 60% of today’s workers are employed in occupations that didn’t exist in 1940.
This implies that more than 85% of employment growth over the last 80 years is because of the technology-driven creation of new positions.
Separate research from Goldman Sachs focuses on the ICT industry, which it says is already using AI to embark on a new wave of innovation.
Goldman says software-as-a-service firms are using it to open opportunities for upselling and cross-selling products and increasing customer retention and expansion.
It sees multiple ways that such businesses can leverage generative AI for growth:
- through new production and application releases
- by charging premiums for AI-integrated offerings
- by increasing prices over time as existing products are supplemented with AI-enabled features and prove their value to customers
Added up, Goldman Sachs Research estimates the total addressable market for generative AI software to be USD150 billion, compared with USD685 billion for the global software industry.
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