Editor's note: Today we published a report from our first Technology & Society Visiting Fellow. Andrew McAfee discusses the potential economic impact of generative AI. This report is the result of McAfee's own research on AI and the economy, working closely with experts across Google to understand how the recent surge in generative AI is impacting productivity, labor markets, and AI-powered societies. It focuses on how it can impact the skills workers need to succeed. economy.
Read or download Andrew McAfee's overview. complete report.
Generative AI is one of the rare technologies that economists call “universal technologies” that are powerful enough to accelerate overall economic growth. These innovations have the potential to positively transform economies and societies.
According to one estimate, for nearly 80% of jobs in the U.S. economy, at least 10% of the tasks could be completed twice as fast (without sacrificing quality) through the use of generative AI.
Traditional general-purpose technologies such as the steam engine and electrification have been changing for decades. However, the impact of generative AI is expected to be felt sooner due to its ability to spread rapidly through the internet and the ease of use provided by natural language interfaces.
This technology is already delivering significant productivity gains, and its impact will grow and become more widespread as people and organizations come up with complementary innovations that leverage the capabilities of generative AI. As a result, overall productivity increases and economic growth accelerates.
In addition to rapid growth, generative AI will bring other changes as well. It reduces the demand for some skills, increases the demand for others, and creates demand for entirely new skills.
Concerns about large-scale technological unemployment are probably exaggerated. The history of general purpose technology shows that the growth it brings is accompanied by strong demand for labor.
However, this increase in demand often occurs with new occupations. For example, over 85 percent of all U.S. employment growth since 1940 has come from entirely new occupations.
The rapid changes brought about by the proliferation of generative AI will require rapid and effective reskilling efforts. These efforts can leverage generative AI itself, a tool with the unique ability to help people learn how to use AI better. Generative AI also accumulates knowledge and makes it available on demand, which can improve performance, especially for entry-level employees, and help close the pay gap.
Conventional general-purpose technologies have transformed leading companies and countries across a variety of industries. We believe generative AI will be just as powerful.
