The reports that artificial intelligence (AI) will take away all our jobs might be greatly exaggerated.
A new study led by European Central Bank (ECB) economists Stefania Albanesi, António Dias da Silva, Juan Francisco Jimeno, Ana Lamo, and Alena Wabitsch offers a fresh view. Their research looks at how AI affected jobs in Europe and suggests things might not be as simple as we thought.
Historically, every time a new technology comes along, people worry about losing their jobs. But often, these fears are exaggerated. The study shows that during the 2010s, a period marked by significant advancements in deep learning and AI, the number of jobs in fields that heavily use AI technologies actually went up in Europe.
AI in Europe: A Surprising Boost to Employment
The study looks closely at 16 European countries from 2011 to 2019. This was a big time for AI, with new tools like deep learning being used in things like language processing and fraud detection. This data shows that about 25% of jobs in these European countries were in fields highly affected by AI automation.
For jobs that usually required less or medium-level education, AI exposure didn’t really change things much. But for jobs needing a higher level of education, there was a clear link: more AI meant more jobs. Specifically, in areas with a lot of AI use, jobs increased by 3.1% according to one way of measuring AI exposure, and by 6.7% according to another method.
Furthermore, it seems that AI is more beneficial for jobs that have more younger workers. For these younger workers, the advantages of AI are about twice as much as for other age groups.
The Global AI Job Landscape: Concerns and Realities
Recent reports have brought attention to how Artificial Intelligence (AI) is changing jobs worldwide. The World Economic Forum (WEF) has said that 23% of the jobs in the world are set to be largely impacted by AI in the next five years. The job market is also expected to suffer a 2% loss of the existing labor force as a result of AI and other economic developments, like the green transition.
For example, IBM halted hiring and will replace 7,800 non-customer-facing jobs with AI. Furthermore, a report from Challenger, Gray & Christmas showed that in just one month (May 2023), 3,900 jobs were lost because of AI.
Interestingly, the job growth in San Francisco’s tech and AI sectors reflects similar trends found in the ECB study in Europe. Both cases go against the usual belief that AI takes away jobs. Instead, they show that AI can create new job opportunities, especially in areas focused on technology.
The Bottom Line
Overall, AI automation is linked to more jobs in Europe, especially in high-skill areas and for younger workers. This is different from what happened with earlier technologies like computers, which reduced jobs for people with medium skills, causing a job market split. However, in this study, the researchers did not see this split happening with AI. Even when looking at software automation, they didn’t find it taking over jobs that need medium skills.
Ultimately, the findings varied for the 16 European countries under study. In most of these countries, AI automation has had a positive effect on jobs, but there are a few exceptions. The extent of AI’s impact on jobs is different in each country. This could be due to various reasons, like the pace of technology diffusion, how educated people are, or the level of regulation and competition in different markets for products and jobs.
It’s also worth noting that conducting a similar study on American data might yield entirely different results, given the differing economic and industrial landscapes.