by Pei-Wen Wang
Artificial intelligence (AI) and machine learning will become the most widely used emerging skills in the job market, and the trend is growing fastest now. Professionals with these skills will have an advantage in leading the course of industry development.
Pandemic & its impact on the labor market
Due to the pandemic, almost all sectors around the globe shut down their offices; because of this, digital technology has become the most important driving force for maintaining the operation of all businesses.
Economic potential to be tapped into
Still in its early stage of development, AI technology is expected to achieve considerable growth within the next decade. The improvement of production efficiency will be seen in short-term benefits, as enterprises improve labor added value and productivity through the automation of operational processes and the assistance of AI.
Total employment demand to increase
It is estimated that by 2025, machines may replace 85 million jobs, while AI-driven economic growth can bring 97 million new positions.
Long-term benefits found amid the transition of the two stages
The first stage features the long-term cost of capital that is lower than that of labor. When AI emerges, machines replace certain amount of jobs, where there will be a technological leap; the second stage will be AI creating new jobs, and the cost of labor is lower than that of the long-term cost of capital, leading to an era of technology plateau.
Transition taking place at the overlapping of unemployment and employment
Unemployment: After AI replaces part of the labor force, unemployment rate increases in certain industries, which will reduce wages at the same time.
Employment: New jobs created by AI will come with high salaries due to a lack of labor, which can attract outstanding talents from other industries, thus leading to labor shortage in certain industries. The pattern goes from one industry to another, bringing a reshuffle of matching labor to each industry one after another.
Irreversibility shows a continued increase of the average income
Even if AI takes on some of the jobs during the phase of technological leap, corporate profits will benefit more people through taxation due to the increased return on investment. Seeing the whole society from a broader scale, the total working time decreases, but the average income rises.
Overall income expansion to create new hiring demand
While AI improves productivity, it also has a great impact on product prices. With the increase of consumer welfare and higher income levels, consumer demand also increases. To meet this new demand, companies will have to hire more labor, thereby creating new jobs.
Conclusion
People often worry that AI will replace a large number of jobs currently done by humans, but in fact, the prosperity of AI will create more job opportunities and bring economic benefits.
