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According to a study by McKinsey & Co, the global increase in generative artificial intelligence will accelerate productivity, create greater prosperity for some and cause significant disruption to knowledge workers. While the report foresees potential economic benefits of up to $4.4 trillion, equivalent to approximately 4.4% of the world economy’s output, it also implies that generative AI will result in a “superpower” for humans, and a significant boost in productivity, so desperately needed by the current economy, said Lareina Yee, a senior partner at McKinsey’s research team.
Generative AI, described as the type of tool that creates content like images or text based on a prompt, could expand into up to 63 different use cases across 850 occupations, providing an increase in productivity between 0.1% and 0.6% over the next two decades. McKinsey urges business leaders to plan the necessary changes this transformation requires, specifically to determine which activities can use better automation.
The study also postulated that this transformation will mainly affect the labor force, particularly higher-wage knowledge workers, as their activities that “were previously considered to be relatively immune from automation”, are being automated. McKinsey previously projected that about half of all worker hours worldwide were spent on tasks that could be automated; now they speculate it's as high as 60-70%. This means employees may have to adapt while some may change occupations or risk losing their jobs.
The potential value from applied generative AI of approximately 75% is already used in customer operations, research and development, marketing and sales, and software engineering. This change could result in banks generating an extra $200-$340 billion in additional productivity alone, making decisions and monitoring fraud more effectively. Profit increases range from 9% to 15%. For R&D, AI could produce a productivity boost of 10%-15%, potentially leading to up to a 25% increase in profits for pharmaceutical companies and medical product producers.
Automation will occur more rapidly in high-wage developed countries than in less-developed economies. The labor force will also feel the pinch, as white-collar workers will be impacted more than physical workers. Unlike in previous technology upgrades, where people with fewer qualifications and less pay would bear the brunt of the impact, people in white-collar jobs need to adjust and possibly forego the attainment of higher degrees. A recent National Bureau of Economic Research study predicts that AI investments will result in a realignment of labor with “significant increases in the share of junior-level employees and decreases in shares of employees in middle-management and senior roles."