The impact of AI on companies could lead to lower wages for office workers

• All black taxi drivers in London must pass a test called Knowledge.
• The advent of Uber has lowered the barriers to entry for this profession by putting knowledge in every mobile phone.
• AI could do the same in multiple white-collar industries.

If you’ve ever ridden in a black cab in London, you’ve noticed how knowledgeable the drivers are.

Give us your London address and chances are you’ll quickly know exactly where you’re talking and the best way to get there. That’s because for decades, all black taxi drivers in London have been required to pass a test called ‘Knowledge’, which requires them to memorize miles of London mileage. According to Transport for London, it takes three to four years of study to pass the exam.

About ten years ago, Uber arrived in London. Knowledge no longer needs to be carried around. With a mobile phone attached to the windshield, anyone can drive down the back streets of a city.

“Suddenly knowing the names of London’s streets was no longer a valuable piece of expertise, and anyone with a driver’s license could drive a taxi,” says Oxford Martin School’s future work. Professor Carl-Benedict Frey, director of , told me. email. “As a result, competition has increased for incumbent taxi drivers whose income has fallen by about 10%.”

AI may have a similar impact on many white-collar industries.

AI will lower the barriers to entry for many technical jobs

A recent study by Erik Brynjolfsson, Lindsey R. Raymond, and Danielle Li measured the impact of AI-based conversational assistants on approximately 5,200 customer support agents at a Fortune 500 software company. The three found that the tool contributed to a 14% increase in his productivity, but importantly, it was the novice employees who benefited the most.

According to their academic paper, “In contrast to previous studies of the computerization wave, we found that these benefits were disproportionately accruing to inexperienced, low-skilled workers.” About. “We argue that this happens because ML systems work by capturing and disseminating behavioral patterns that characterize the most productive agents.”

In other words, lessons learned from months or years of experience are baked into AI tools. Once a novice employee has access to these tools, the performance gap with more experienced colleagues becomes apparent in the same way that Uber drivers can suddenly compete with black cab drivers for knowledge. can be filled.

Customer support operations aren’t the only areas where this dynamic can take hold. Think translators, web designers, lawyers, accountants, copywriters, and human resources professionals alike. Skills developed through advanced degrees and years of experience in specific roles and in specific companies may soon be incorporated into generative AI tools, lowering the barriers to entry.

Rise of AI tools could help millions of new software developers

Microsoft CEO Satya Nadella, for example, recently told Time magazine that AI tools could lower the barrier to entry for software developers. Referring to Microsoft’s AI-enabled GitHub Copilot coding tool, he said:

To give a concrete example, developers using GitHub Copilot are 50-plus percent more productive and stay in flow more. We have about 100 million professional developers, and he probably has 1 billion professional developers in the world. The total number of developers will increase significantly as the barriers to becoming a software developer are lowered. This doesn’t mean that good software developers will continue to be good software developers, but that it increases the ability of more people to enter the field.

While this is good news for many aspiring software developers, it is also bad news for many existing software developers. What was once a high-paying job that required specific training may become a job that requires less training and pays slightly less.

(For more on how AI will impact software developers, I highly recommend this article by my colleague Aki Ito on “The End of Coding As We Know It”.)

It’s worth noting that Frey’s research shows that the rise of Uber didn’t completely wipe out black taxis, but rather led to lower incomes for those drivers, contributing to a decline in the total number of licensed taxis in London. It means there is a possibility. . (The pandemic had an even bigger impact on driver numbers.)

“Some jobs, such as tax filers and web designers, may disappear due to automation,” Frey told me about the types of jobs that could be affected by the rise of AI tools in the workplace. Told.

“But for the most part, people in these jobs will face more competition, similar to taxi drivers with the rise of Uber.”