Disruption Ahead: The AI Economy and More Jobs for Robots
Is artificial intelligence taking us to Robocalypse or Robotopia? Hear a unique point of view from a financial market futurist on how AI is transforming economies, businesses and jobs.
New uses for artificial intelligence (AI) seem to emerge every day. We’re already seeing the use of AI and its automation capabilities with ChatGPT and the increased abilities of robots to take on common tasks. What’s next?
Leading futurist and economist Jason Schenker shares his views on the future opportunities and challenges ahead. With a master’s degree in applied economics (along with two other master’s degrees and numerous professional certifications), Jason trained as an economist scrutinizing the financial markets for corporate and government clients. As a financial market futurist, he now focuses on identifying larger themes and trends that could impact the global markets and economy 10, 20 or 30 years out.
As president of Prestige Economics, Jason has been ranked by Bloomberg News as the No. 1 forecaster in the world in 26 different categories since 2011, including for oil prices, industrial metals prices, the euro, the British pound, agricultural commodity prices, gold prices and U.S. jobs. He’s also chairman of The Futurist Institute. Its Become a Futurist® program trains leaders in a variety of industries, including consulting, accounting, finance and national security.
Listen to our interview with Jason to hear his thoughts on the disruption ahead.
Aired on December 7, 2023
How did we get here with AI?
Jason frames artificial intelligence in three ways: software, integrated hardware and software and generative AI.
Software: The finance industry has led the development of programs that synthesize large amounts of data to quickly perform calculations, generate charts, identify trends and make data-driven predictions.
“It's not that you suddenly didn't have people working in finance. It's just maybe now you had fewer errors and you had better recordkeeping and now you had people in finance doing way more stuff than you ever imagined.”
Integrated hardware and software: Robots are examples of software telling hardware what to do and how to do it. Used in manufacturing and warehouses for many years and more recently in e-commerce, robots perform physical tasks faster than any humans.
Generative AI: The technology powering AI actually learns from huge datasets and its architecture understands natural language to generate new things as well as power automation and robotics to new levels.
What is the biggest opportunity for AI?
CEOs’ and corporate boards’ jobs are focused on identifying ways to increase shareholder value. Currently, two of the three main drivers of growth—capital, labor and technology—are significantly constrained. Higher interest rates are hindering capital-driven growth, and labor is tapped out. Recent labor data show that there are around 9.6 million open jobs in the U.S. and 1.8 million people collecting unemployment—the labor shortfall is massive.
This situation leaves technology as the best lever currently for companies to boost corporate profits and find ways to drive new levels of activity.
“As an investor, what does that mean? Well, that means that there's probably going to be many companies investing a big mandate toward more technology, more AI, and that means workers are going to be doing more. … We could give AI to our workers and have them all produce more work than we ever imagined possible—and that's where I see the potential benefit.”
What jobs are at risk?
Could artificial intelligence replace you? Jason sees AI having the biggest impact on mid- and back-office functions.
“I think the litmus test for opportunity is a question: Is there anything you do in your job that you would describe as standard or boilerplate? How many shareholder memos have been written in the history of the world? How many job descriptions have been written? How many press releases? If we think about what ChatGPT has been trained on, there's an infinite number of these things.”
What does AI mean for investors?
“For investors, I think there are a couple of big pieces and I think one is first of all, being aware that there's a productivity upside across the entire economy and that businesses need to be looking at where they can use the leverage. If you're making investments in individual companies, if they're not looking at this, they're really missing out.”
Additionally, the concept of a “small” business may change. “If you're scaling up a business, you may not need as many people to be staffed in certain functions … now you can generate a lot more content that is standard, that is boilerplate, and allocate your staffing more efficiently.”
What are the biggest risks of AI?
With all the productivity enhancements, Jason also identified a number of potential risks and unintended consequences that can be associated with AI. These risks have implications for how you train employees, especially young people just entering the workforce.
Error proliferation: A significant risk is an overreliance on something like ChatGPT or another AI tool that does all the work. You need people trained to spot glaring errors and “AI hallucination”—an AI tool can give you a very confident answer, but it's not necessarily correct. This means quality control becomes much more valuable.
Old data: Some AI tools don’t have access to current data, which means you could be off on some simple things that matter a lot. AI is a tool in the toolkit, not the only tool.
Codifying biases: Different biases in historical data suddenly proliferate.
AI becomes dumber: Garbage in, garbage out—quality declines and you have a ripple effect across a business. An example of this occurred earlier in the year when it was discovered that ChatGPT’s ability to predict if a number was a prime number fell dramatically—somehow, it's learned the wrong things.
Everything becomes dull: As someone who frequently writes articles, Jason gave the example of asking ChatGPT to write an article on a topic.
“I want you to write seven articles on this topic, 700 words each. Every one of those articles will speak much but say little. There's nothing unique in them because they're drawing on a repository of lots of information. Nothing unique, nothing distinctive, nothing funny, no anecdotes, nothing that we would describe as human … everything becomes dull and then the new models are trained on that information and then you get a vicious cycle.”
Intellectual property risk
Jason warned that even if companies tell employees not to use AI tools, you have to assume they’re using them. If they are not properly trained, they could put in code, terms from confidential agreements and much more.
“Now what you have that was secret and proprietary to your business suddenly goes into a big brain of everything else. And now it's everywhere and you don't own it anymore. … We've already seen examples of this. This is going to become a bigger risk. And so I have one piece of advice for anyone using ChatGPT and that is to be greedy—take from it, don't give to it.”
How do you see government regulation of AI playing out?
“We are going to see more regulation for sure. There was an executive order out of the White House in October about a number of different things related to national security and competition and various other things as well. In the finance sphere, I would expect the regulations to be focused where they very often have been for finance—and that is consumer protection and data protection. If individual, retail consumers get hurt, the regulators show up really fast, and I think that will always be true.”
Should you be preparing for Robocalypse or Robotopia?
“Do I think the robots take all the jobs and no one has a job anymore and everyone is impoverished? No. Do I think the robots take all the jobs and everyone's just gloriously wealthy? I don't believe that either.”
More jobs will likely go to not only robots but also to people committed to continuing education, according to Jason.
“It's probably never going to be enough going forward because we're always going to have new technologies. We're going to have to learn, we're going to have to be able to use an implement that will drive productivity gains, that will drive economic growth, that will drive broad-based wealth creation. And on the individual level, the people who embrace that notion have to be learning new skills in formal and informal education settings in order to be moving up the ladder.”
The views expressed in this presentation are the speaker’s own and not necessarily those of American Century Investments. This presentation is for general information only and is not intended to provide investment, tax or legal advice or recommendations for any particular situation or type of retirement plan. Please consult with a financial, tax or legal advisor on your own particular circumstances.
Jason Schenker, Prestige Economics and The Futurist Institute are not affiliated with American Century Investments.