Generative AI, such as ChatGPT, DALL-E, Bard, Midjourney, and others, have significantly accelerated the potential for automation in work. A report from McKinsey shows that the percentage of work hours that, in theory, can be automated is rising from 50% to 60-70%.
The surge is primarily attributed to the remarkable advancement of generative AI’s natural language capabilities. As a result, it can now tackle a broader range of tasks and interactions, paving the way for increased automation across industries. McKinsey’s report suggests that the future of work will largely rely on automation and the technological innovations of AI.
Embracing AI & Automation Sooner Than Expected
The rapid advancement of AI and automation technologies is reshaping the future of work at an accelerated pace. Compared to expert assessments made in 2017, the projected timeline for the widespread adoption of automation has compressed significantly. The midpoint scenario, representing the point at which 50% of current work activities will be automated, has advanced by a decade.
It means that within the next decade, the way we work and the nature of our jobs will undergo significant transformations. AI and other advanced technologies will play a pivotal role in automating various tasks and processes employees traditionally performed.
For instance, instead of a customer service representative answering multiple repetitive questions from clients, an AI chatbot can respond. This creates a faster service for the business while freeing up time for the employee to focus on other tasks. This shift reflects the increasing confidence among experts and organisations in the imminent arrival of advanced technological capabilities.
As AI and automation technologies continue to advance, they will become more sophisticated and capable of performing complex cognitive tasks. It will enable them to handle a wide range of activities across different industries and sectors, from routine administrative tasks to advanced data analysis, decision-making, and even creative endeavours. In other words, work as we know it will significantly change based on AI and technology advancement within a decade.
“Labour productivity will accelerate to achieve economic growth and enhance prosperity – McKinsey Report. “
Transforming Key Sectors
The change Generative AI brings is anticipated across various sectors, but four areas stand out. The areas of Customer operations, marketing and sales, software engineering, and research and development (R&D) hold immense potential for generative AI implementation. Whether supporting customer interactions, generating creative content, or even drafting computer code based on natural-language prompts, generative AI offers measurable outcomes across 63 specific use cases.
It is also expected to impact banking, high-tech, and life sciences and contribute a substantial percentage of their revenues. For instance, the banking industry alone could experience an additional annual value of $200 billion to $340 billion with full implementation. This happens because risk assessment in banking can be analysed by AIs, making it easier for financial institutions to expand their markets to new customers without high risk. Moreover, AI brings automation to lending processes, fraud detection, and customer insight, allowing the banking industry to thrive better and faster.
Retail and consumer, packaged goods sectors also show promise, with a potential impact ranging from $400 billion to $660 billion per year.
It’s a good time for employers to leverage recruitment analytics platforms like Giant to find the right talents to suit the coming change in the workforce and upskill current talents.
Adapting to the Changing Work Landscape
With automation technologies, including generative AI, evolving at a rapid pace, organisations and individuals must prepare themselves to adapt to the changing landscape of work sooner than anticipated.
Generative AI is predicted to yield labour productivity growth that could reach a remarkable 0.1 to 0.6% annually up to 2040. This growth rate would depend on the pace of technology adoption and the successful redeployment of worker time into other productive endeavours.
Current projections from Mckinsey suggest that between 2030 and 2060, around half of today’s work activities could be automated.
In fact, Generative AI has the potential to significantly enhance productivity and contribute trillions of dollars to the global economy. Mckinsey’s report identified 63 use cases where generative AI could generate an annual value ranging from $2.6 trillion to $4.4 trillion. For instance, in the healthcare sector, generative AI could revolutionise drug discovery and development processes, leading to more efficient and targeted treatments. This could significantly reduce costs and improve patient outcomes, contributing to substantial economic benefits. In manufacturing, generative AI could optimise production processes, leading to increased efficiency, reduced waste, and improved product quality.
Such enhancements would have a profound impact on the bottom line of companies operating in this sector and, subsequently, on the overall economy.
The entire GDP of the United Kingdom in 2021 was $3.1 trillion. However, when considering the broader impact of incorporating generative AI into current software outside these use cases, the estimate might quadruple, boosting the overall impact of artificial intelligence by 15 to 40%.
The impact is particularly pronounced in knowledge-based work, which includes higher-wage occupations requiring advanced education. As a result, generative AI can reshape the anatomy of work by freeing up time for employees to prioritise more complex and strategic tasks.
The evolving landscape calls for proactive measures to support workers during these transitions, including reskilling, upskilling, and facilitating career shifts.
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