Why AI Isn’t the Death of Jobs

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When pundits talk about the impact that artificial intelligence (or AI) will have on the labor market, the outlook is usually bleak, with the loss of many jobs to machines as the dominant theme.  But that’s just part of the story — a probable outcome for companies that use AI only to increase efficiency.  As it turns out, companies using AI to also drive innovation are more likely to increase head count than reduce it.

That’s what Jacques Bughin and his colleagues at McKinsey & Company recently learned through the McKinsey Global Institute’s broad-based research initiative aimed at understanding the spread of AI in economies, industry sectors, and companies.  The researchers polled 20,000 AI-aware C-level executives in ten countries to compile a sample of more than 3,000, mostly large, companies, identified distinct clusters within that pool, and ran a variety of scenarios on those clusters to project the effects of AI on employment, revenue, and profitability.

This research and analysis suggests that although AI will probably lead to less overall full-time-equivalent employment in those ten countries by 2030, it won’t necessarily lead to massive unemployment.  One major reason for this prediction is because early innovation-focused adopters are positioning themselves for growth, which tends to stimulate employment.

Growth is a key part of the equation linking the performance and employment shifts we’ll see from now through 2030 for five types of companies.

Here’s how the McKinsey & Company experts expect things to play out in the five clusters of companies the authors examined.

Type #1: Enthusiastic Innovators are pioneering companies that make early investments in AI and embrace the disruption it can create in the quest for advantage, adopt a full range of AI technologies and use them to bolster innovation and efficiency.  These companies are analogous to what sociologist and communication theorist Everett Rogers called “early adopters” back when he coined the term — they’re intrinsically motivated to use new technology to shape and open markets.  While this approach is potentially complex in the short term, the McKinsey & Company analysis shows that by 2030, the...

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