Episode Transcript
[00:00:00] Is it likely that AI is going to wipe out 50% of the jobs in the next 20 years? There's a new comment that seems to have gone viral from Dario Amadai at Anthropic that AI is going to create a bloodbath, quote unquote, in the job market. And 50% of the jobs will be wiped out in the next 20 years, leading to 20% unemployment, particularly with entry level workers. And I don't know why he's making those kinds of predictions or what qualifications he has for making those kinds of predictions, but let me give you my perspectives on why this is a crazy and incorrect assumption. Yes, AI can automate a lot of things today. It's reasonably good at automating software engineering, it's reasonably good at writing and research. It's reasonably good or pretty good in analyzing data.
[00:00:54] And there's no question that as AI becomes more agentified and we have more use cases trained into the AI, the systems will get smarter. But you have to realize that most of the things that happen in a business, in a job, in work, do not have right and wrong answers. And the reason that companies build products and services and go into business and the reason that entrepreneurs start companies is to create new products, new services, new offerings to meet needs of our lives, consumers or businesses in the market to possibly make some money at it. And this innovation process has been going on probably since the invention of fire in the caveman days.
[00:01:39] And it will continue to go on because we as humans, not as machines, are creative learning animals. Insert AI and whatever you can define as intelligence. And by the way, I also don't really believe there is such a thing as general intelligence and AI. I think human intelligence will always be different from machine intelligence. What we do as humans is we learn how to use the AI and how to exploit it and how to add value on top of it. The AI doesn't replace our jobs. Now, you know, we can go back in time and look at lots and lots and lots of jobs that have been destroyed. My favorite example is the job of the steno pool at IBM that used to take messages from people on the phone because we didn't have voicemail and used to write letters for us because we didn't have word processors and they had typewriters and we didn't have typewriters at our desks. Those jobs clearly went away, creating opportunities for those people to do other things. By the way, the unemployment rate is at an all time low roughly now than about as low as it's ever been. I would imagine those steno pool people became executive assistants. Some of them went into sales, some of them went into customer service, some of them went into healthcare, some of them went into other things depending on what they wanted to do with their lives. And, and they probably didn't miss the days that they sat around all day typing, which probably wasn't the most fulfilling job in the first place. That is what AI is going to do. It's going to eliminate and it is eliminating a lot of routine work. But if you look at the behavior of people who use AI and we have, we have lots of data on this and the people that use Galileo are AI. The more they use it, the more they use it. They use it more and more and more because as it delivers intelligence, quote unquote to a human, the humans can come up with even better ideas on what to do. So let's assume we had self driving cars, which we don't. Let's suppose we did have robots in our homes. Would we do away with all of the repair services in our homes, Would we do away with all the transportation services, all the drivers? No, we would create new products and services to maintain or update or complement the robots in our homes. And sure enough, those fleets of driverless cars are going to be run by big financial organizations. They're going to have to run those fleets, they're going to have to repair those cars, they're going to have to manage those cars and figure out how to differentiate their fleet from everybody else's fleet. That is what business is all about. It's all about adding value on top of existing products and services in the market. And those are human skills. So my experience in the job market is that I don't care what the technology is. I've been through four or five, you know, generations of this myself. We as humans learn how to adapt and add value above it. And let's assume that AI becomes ubiquitous and we can all buy AI, ERP and AI financial systems, and AI analytics systems, and AI CRM systems, and AI sales systems, then we're all the same. What's the difference between your company and my company? The value add is humans. What we decide to do with it, how we customize it, how we change it, how we improve it. I mean, that's why things like app marketplaces and service businesses never go away. Because we're always looking for ways to add value on top of a business that somebody else has created. And that's the sort of creative destruction inherent in, in a growing economy.
[00:05:18] The second topic That I found a little bit inflammatory in some of those comments was that entry level jobs were going to go away because quote unquote, entry level jobs are very routine. And those are the kinds of jobs that can be done by computers. If you read the article I just wrote this today, in fact, that's also, I believe, incorrect. The reason companies hire entry level employees is not because it's the most productive way to get things done. I mean, sometimes it is, sometimes there's low level work that somebody has to do and so a trainee or an entry level worker can do it and somebody more senior won't do it or doesn't have time to do it. But ideally we automate that away and we use entry level workers as a talent pipeline, as an opportunity to bring in new ideas, as an opportunity to bring in new skills. Most of the banks I talked to recently when I was in Europe told me that it's the young, right out of college, right out of school workers that are teaching the senior people how to use the AI tools they already have, like the Microsoft copilot, because they're actually thinking about their work differently than older people normally would. Young workers become managers, become supervisors, they manage the AI systems, they move into middle management and they become the executives of your company. And they can't do that overnight. And you can't always, nor is it financially effective to hire senior people every time you have a position open. So there will always be an opportunity for entry level workers. People my age eventually retire and go away and you have to build a pipeline of new people. To say nothing of the fact, as I mentioned in the article, that the culture of organizations, which is vital to organizational success, is tremendously enhanced when there are young people and middle tiered people and senior people working together. Young people bring in new ideas, new levels of energy. They question authority, they question assumptions we've had in the past. Oftentimes they're familiar with trends and technologies and work models that we would never consider as older people. So I don't see this happening either. Now, you know, some of the statistics show that the unemployment rate for people getting out of college is high right now. And I see that and I think that makes sense. I think there's a general tightening of budgets going on in companies. They're allocating financial dollars away from human capital towards technology. Right now, I understand it, budgets are up 62% this year. I'll tell you, hiring is not up anything like that. In fact, HR budgets are probably flat to declining. But that said, every well run Growing, thriving company I talk to knows doggone well that they're going to be hiring young people, they're going to be participating in college recru, and they need programs to bring young people into the workforce. Now, that is not to say that AI is not going to disrupt a lot of things. There's no question that this technology we're witnessing may be, in my mind, the most transformational technology we have ever experienced in our careers or in our lifetimes. And so those of us that are in white collar work or desk work or analytic work or writing or creative work or other roles that can be automated by these things, we are going to have to get with the program. So there's a lot of learning to go on here. There's a lot of leaning into the technology.
[00:08:41] We need to experiment with some of these new tools. We need our IT departments to give us standards and data management systems so we don't mess things up by accident. We need to hope that the vendors don't ruin our lives with advertisements and data leakage and all sorts of threats from these systems. And we're going to have to figure out how to manage and govern and implement these things. And we're moving to a world of creator, internal creator systems. You know, the last couple of decades that I've been doing research and analyst work, most of the big application software innovations have come from vendors because the cloud, you know, dramatically improved the speed and time to market of new products. I think once AI hits the streets and, and the IT departments have tools like Microsoft Copilot or GPT with development environments attached to them, a lot of this stuff is going to be built internally, which threatens, of course, the vendors, the big kind of ERP types of vendors that we do business with. So there will be a lot of changes in jobs. But I would say just like we went through in the digital revolution and in the industrial revolution before that, it's incumbent upon us as business leaders, as managers, as HR people to show people what these new roles are, to give them the opportunity to learn and to encourage them to lean into this AI revolution and not be afraid of it. These are not evil technologies. They are not out there to hurt you. I think some of that narrative, you know, maybe will go away. And I think the tech vendors and their scientists and engineers are adding massive amounts of value to the workforce, but they're not building solutions on top of AI. That is our job as business people. And that's why I'm not at all convinced that we're going to have a massive unemployment as the workforce and our economies tilt and move towards much, much more intelligent technologies. Under the scenes. We talk to HR organizations and senior leaders all the time. That is what we do for a living. We educate people on these technologies and we talk to many, many companies. And the innovations and new ideas and creativity that's being unleashed around AI is just incredible. So as far as will there be enough people?
[00:10:55] Probably not. We're going to have a low unemployment rate and lots and lots of jobs for a long time to come. Thank you.
