BY CHUMA MEMELA
Artificial Intelligence (AI) has undeniably taken the world by storm. Since the release of Chat GPT in late 2022, AI has become a buzz word and AI has been transforming industries, businesses, and our daily lives. Consider this, upon Open AI’s release of Chat GPT, the AI Large Language Model tool garnered 1 million users in just 5 days. This rate of adoption set a record and is a testament to the rapid transformation of AI. As AI technology continues to evolve, its influence on business operations and employment landscapes increasingly becomes a concern for both employers and employees.
To understand the scale of AI’s impact, consider these statistics from reputable firms:
- Goldman Sachs predicts that two-thirds of jobs could be partially automated by AI. However, many of these jobs will be complemented by AI rather than substituted by it (Goldman Sachs, 2023).
- Additionally, world renounced accounting firm PWC cites that Seventy-three percent of U.S. companies use AI in some aspect of their business (PwC, 2023).
- Lastly, PWC once again stated that Fifty-four percent of companies had used generative AI in their business by November 2023—just one year since ChatGPT was released (PwC, 2023).
AI as a Driver of Business Efficiency
It is common knowledge that businesses are constantly seeking ways to improve processes, attract more customers, and achieve various key metrics, all aimed at increasing profitability. One of the most significant advantages of AI in the business realm is the unprecedented efficiency it brings. Consider this, AI benefits businesses by:
- Reducing Costs – AI automates routine and repetitive tasks, significantly reducing labour costs.
- Accelerating Processes – AI-powered systems can process vast amounts of data at unprecedented speeds, leading to quicker decision-making and enhanced productivity.
- Enhancing Employee Experience – AI tools can take over tedious tasks, freeing up employees to focus on more creative and intellectually stimulating work.
The Challenge of Job Displacement
Though business has fully embraced AI, the same has not been witnessed on the employee end. While the benefits of AI for business efficiency are clear, there is an inevitable downside which is job displacement. Consequently, AI has received push back from those who fear being replaced. However, I believe it is important for the world to understand that AI is not going anywhere, If anything, individuals need to learn to embrace it and its potential pitfalls.
To paint a probable picture of what is to come, a McKinsey report predicts that between 2016 and 2030, AI-related advancements may affect around 15% of the global workforce. Another statistic cites that the evolution of AI could result in 400 million workers being displaced. Added to that, a substantial 77% of people are concerned about their future and what effects will AI have on their imminent future.
Using a macroeconomic lens to observe the issue, a surge in unemployment will have broad economic repercussions. This will be witnessed through reduced consumer spending, increased demand for social services, and potential social unrest among others.
The Creation of New Opportunities
Despite the challenges, concerns, and pushback surrounding AI and digital transformation, there are notable positive outcomes emerging. Three notable shifts will be seen in the form of new roles being created, new skills being developed and a surge in innovation alongside entrepreneurship. Let us dissect this:
As businesses adopt AI technologies, new roles will emerge. According to World Economic Forum research, AI is projected to create around 97 million new jobs, potentially countering workforce displacement concerns. These roles will often require advanced skills and expertise in areas such as AI development, data science, machine learning, and cybersecurity.
The shift towards AI-driven operations also necessitates a focus on reskilling and upskilling the workforce. It therefore means that continuous learning and adaptation will be crucial for employees to stay relevant in the evolving job market.
Lastly, AI opens up possibilities for innovation and entrepreneurship. Individuals and businesses can leverage AI to create new products, services, and business models, thus fostering economic growth and development.
In Closing
It is important to note that the integration of AI into business is a double-edged sword. On one hand, it promises unprecedented efficiency, cost savings, and enhanced employee experiences. On the other hand, it poses significant challenges in terms of job displacement and economic impact. However, by embracing the opportunities for new job creation and focusing on skill development, businesses and individuals can navigate this transformation successfully. The key lies in balancing the benefits of AI-driven efficiency with proactive measures to address the human impact of this technological revolution.
About the author
Chuma Memela
Chuma Memela
Chuma Memela, known as “The Data & AI Guy,” is dedicated to helping professionals and businesses demystify data and artificial intelligence. He is currently a candidate for a Master of Commerce in Information Systems and has an impressive academic background, having graduated cum laude from the University of Fort Hare (UFH) as a top achiever. Chuma is also recognized as a top achiever at the EBL Institute Eastern Cape and serves as an EBL Institute Ambassador for 2024. His passion for data and AI, combined with his academic excellence, positions him as a leading voice in the field of digital transformation and innovative technology.