The potential macroeconomic benefits of generative artificial intelligence and machine-learning technologies are staggering, on par with transformative technologies that fed the industrial revolution or the information age. Generative AI, by some estimates, stands to double the rate of U.S. productivity growth after a decade of widespread adoption and add trillions of dollars a year to global economic output.

 

The microeconomic disruption of such game-changing innovation in the workplace, however, is a more complicated story. The technology behind the popular ChatGPT application will take tasks from millions of employees higher on the wage ladder more than it does from those whose jobs have been diminished by factory or warehouse robots in recent decades. So-called knowledge workers and white-collar professionals will feel more pain this time around.

Generative AI algorithms already can, or are expected to soon, read and summarize into bullet points business, medical and legal documents. Startup AI firms are developing chatbots as well as generators for text, computer code, images, video, design,voice and music. Illustrators, healthcare workers, actors, educators, legal researchers, office workers and drug-company technicians could be the first occupations threatened with this new form of AI.

Navigating AI

Here's how you canleverage generative AI at work and manage the risks and rewards of this transformative technology.

Ultimately, then, the issue is whether displaced skilled employees find comparable work or if they will be consigned to less economically valuable work in the new AI-driven economy.

"People should be thinking about whatare the opportunities and risks. We have a labor shortage for as far as the eye can see. We will not run out of jobs," said David H. Autor, a Massachusetts Institute of Technology economics professor who studies labor-market impacts and technological change. "It's a question of whether we will have jobs that make use of scarce skills where people are valuable or whether we have jobs that are much more menial."

Tailoring the technology

Some professionals already find themselves in conflict with AI. In Hollywood, theactors union is striking in part over the threat of "digital replicas"a form of AIand the potential that studios could produce entertainment without actors' physical presence or consent, and without compensating them for it.

The union says that studios could profit from these replicas while the actors have no control over their images or creative output. "We see it coming and there has to be guardrails," said Duncan Crabtree-Ireland, the chief negotiator for SAG-Aftra.Companies in other industries, meanwhile, are adapting generative AI to their workforces or thinking how to.Jim Weatherall, vice president for data science and AI at drug companyAstraZeneca, said the company has been using generative AI, or a form of it, for several years. There was a time when a biologist could read all the available scientific literature out there. "Clearly you can't do that now with the masses of information," Weatherall said.

Generative AI allows researchers to "intelligently interrogate" the information and it is envisioned that it could then go to the next step and suggest untapped areas for developing drugs, Weatherall said.

Generative AI algorithms also could speed up the discovery of a new drug molecule that can go through many thousands of iterations before the correct one is landed on. A chemist, with the help of AI, may need to be involved only in the "last mile" of developing the molecule, Weatherall said.

The tool can summarize the financial documents in bullet points, "the kind of thing that more junior analysts or business professionals would have done manually," Kokko said.

An issue with generative AI is so-called hallucination, with the AI reaching faulty or wrong conclusions.AlphaSense has taken precautions against hallucination by, in part, linking to the underlying data and training the generative AI tool to access trustworthy business content, the company said.

Morgan Stanley, meanwhile, has developed a generative AI tool that enables thousands of employees to query 100,000 internal corporate documents for answers.The Wall Street bank says the goal of the tool is to free up time for advisers to do more important things, such as talking with clients. They can ask the AI for research on a stock, the benefits of a Morgan Stanley product or how to open an individual retirement account.The toolreads through the 100,000 documents for text on the topic and summarizes an answer. Morgan Stanley tested the tool on thousands of questions asked of it by employees who then rated the answers to help train it.

The big picture

Parsing the tasks of hundreds of occupations for automation potential with generative AI, the McKinsey Global Institute estimated in a June report that 75% of the value of generative AI could fall in four areas: customer service, marketing and sales, software engineering, and research and development.

Generative AI could interact with customers, develop creative content for marketing and sales and draft computer code based on natural-languageprompts, the report said.

Higher ImpactGenerative AI stands to have a greater relative impact on the jobs that are most often held by workers with higher levels of educational attainment than less-technicaloccupations.Overall technical automation potential in theU.S.Source: McKinsey Global Institute analysis

The tool can summarize the financial documents in bullet points, "the kind of thing that more junior analysts or business professionals would have done manually," Kokko said.

An issue with generative AI is so-called hallucination, with the AI reaching faulty or wrong conclusions.AlphaSense has taken precautions against hallucination by, in part, linking to the underlying data and training the generative AI tool to access trustworthy business content, the company said.

Morgan Stanley, meanwhile, has developed a generative AI tool that enables thousands of employees to query 100,000 internal corporate documents for answers.

The Wall Street bank says the goal of the tool is to free up time for advisers to do more important things, such as talking with clients. They can ask the AI for research on a stock, the benefits of a Morgan Stanley product or how to open an individual retirement account.

The toolreads through the 100,000 documents for text on the topic and summarizes an answer. Morgan Stanley tested the tool on thousands of questions asked of it by employees who then rated the answers to help train it.

The big picture

Parsing the tasks of hundreds of occupations for automation potential with generative AI, the McKinsey Global Institute estimated in a June report that 75% of the value of generative AI could fall in four areas: customer service, marketing and sales, software engineering, and research and development.

Generative AI could interact with customers, develop creative content for marketing and sales and draft computer code based on natural-languageprompts, the report said.

Higher ImpactGenerative AI stands to have a greater relative impact on the jobs that are most often held by workers with higher levels of educational attainment than less-technicaloccupations. Overall technical automation potential in theU.S.Source: McKinsey Global Institute analysis

"You look at how much of people's work could potentially be automated, and then make assumptions about that time that's freed up and repurposed in the labor force," said Michael Chui, a partner at the McKinsey Global Institute and a co-author of the report.McKinsey's research estimates that generative AI could add the equivalent of$2.6 trillion to$4.4 trillion a year globallyroughly the same as the U.K.'s gross domestic product.

In a separate report in July,Goldman Sachs estimated that generative AI could raise annual labor productivity growth in the U.S. by 1.5 percentage points after 10 years of broad adoption. Twenty-five percent of U.S. work tasks could be automated over time with the AI advances, according to the report, titled "Generative AI: Hype, or Truly Transformative?"Assuming a 40-hour workweek, the 1.5 percentage points would be equivalent toaccomplishing anadditional 36 minutes of work.

"A boost of this size would roughly double the recent pace of U.S. productivitygrowth, and would be about the same size as the boost that followed the emergence of prior transformative technologies like the electric motor and personal computer," Joseph Briggs, senior global economist at Goldman Sachs, wrote in the report.

The productivity gains of the type that Goldman Sachs is talking about amounts to$400 billion to$600 billion a year, or about the same as the current output of the chemical or utility industries, said Mark Zandi,Moody's Analytics chief economist.

The long game

To be sure, the transformative impact of generative AI and related technologieswon't happen overnight. Goldman said the productivity gainswouldn't necessarily be realized over the next 10 years.

These are the early days of generative AI, MIT's Autor said, "the first inning of the first at-bat of the game." Nothing is set in stone related to projected productivity benefits, he said. Generative AI could deliver them. Or it could be disruptive in the workplace without outsize gains.McKinsey's Chui said generative AI clearly has potential benefits and harms. "For the employees that are best able to use these technologies, it gives them superpowers. And sothat's the exciting part of it. But also, the challenging part of it is that it will transform the work that people do. And sothat's the hard part of it."

Summary: The technology behind the popular ChatGPT application will automate tasks from millions of employees higher on the wage ladder rather than from those holding lower-wage jobs as in recent decades. Interesting graphics are provided to illustrate which professions will be most and least hard hit by generative AI over coming decades.

Answering these questions with more details and do not take anything from chatgpt:

1. The potential macroeconomic benefits of generative artificial intelligence and machine-learning technologies are staggering, according to the article. Why?

2. In a nutshell, what are the "benefits"?

3. If jobs are being eliminated, what can the word "benefits" mean?

4. Which kinds of jobs were eliminated by new technology in the past?

5. What is different today about generative AI?

6. How does this trend relate to strategic management?

7. Is generative AI a "strategic" technology? In what way?

8. In a nutshell, how can firms draw on generative artificial intelligence and machine-learning technologies to gain a competitive advantage?

9. How sustainable is this competitive advantage?

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1 The potential macroeconomic benefits of generative artificial intelligence and machinelearning technologies are staggering due to their capability to significantly increase productivity growth and c... View the full answer