Leading multinational investment bank and financial services company Goldman Sachs has serious concerns about the impact artificial intelligence (AI) automation will have on the labor market.
In a recently published research report, Goldman Sachs Sachs Group Inc. analysts said, “Of those occupations which are exposed, most have a significant — but partial — share of their workload (25-50%) that can be replaced.”
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How Many Jobs Are At Risk?
The answer depends on who you ask, the industry and the geographical location of the companies in question.
The Goldman Sachs report notes that as many as 300 million jobs could be affected in some way worldwide.
In some ways AI technology also has the potential to boost labor productivity growth and global GDP. ChatGPT is already becoming an everyday part of nearly every large business on the planet. And startups like RAD AI created the world’s first AI marketing platform built to understand emotion to increase the efficiency of campaigns. But these solutions primarily increase efficiency, not necessarily replace jobs.
In some instances, it could, however, reduce the need for freelance labor in these markets. Rather companies would be more inclined to find AI-based solutions.
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What Jobs Are — And Aren’t At Risk?
Some industries and professions are more likely to be affected by AI automation than others. Jobs that require physical work, such as manual laborers, are less likely to be affected.
The report explains that office and administrative support jobs in the United States have the highest proportion of tasks that can be automated at 46%. That’s followed by:
- 44% for the legal industry
- 37% for architecture and engineering
- 36% for the life, physical and social sciences sector
- 35% for business and financial operations
Flip the script and the report says that only 1% of jobs in the building, ground cleanings and maintenance sector are vulnerable to AI technology. That’s followed by installation, maintenance and repair work (4%) and construction and extraction (6%).
Overall, the report states that roughly 25% of work could be automated in the United States. The U.S. is followed closely behind by Europe at 24%.
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Will Other Countries Feel The Impact?
While AI automation is projected to have the greatest impact in the United States, other countries are also at risk of disruption.
“Our estimates intuitively suggest that fewer jobs in EMs [emerging markets] are exposed to automation than in DMs [developed markets] but that 18% of work globally could be automated by AI on an employment-weighted basis,” the Goldman Sachs report said.
In addition to the United States, the other countries most likely to be affected include Hong Kong, Israel, Japan and Sweden.
Summary
The overarching theme of the Goldman Sachs report is that AI will impact the labor market. That’s clear at this point. But what isn’t as clear is just how disruptive it will be.
“The impact of AI will ultimately depend on its capability and adoption timeline,” the report says, noting that the overall impact will hinge on how powerful AI technology becomes and how it’s implemented in individual industries.
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