Robots Will Make Us Richer But Those Slow to Adopt Will Lose Out

Robots Will Make Us Richer But Those Slow to Adopt Will Lose Out

Fears abound around the threat to employment posed by the latest technology in the world of AI and robotics. However, a recent study by international business consultancy firm McKinsey predicts that AI in the workplace should be welcomed rather than resisted. Its report concludes that the technology is set to boost the global economy by $13 trillion by 2030. Managed correctly, that should make all of us wealthier through the generation of what amounts to a 1.2% boost to annual GDP growth over the intervening period.

However, the sting in the report’s tail is the forecast that early adopters of the latest technology in AI will reap the rewards while ‘laggards’ stand to see their cashflow decline by up to 20%. Companies that form the vanguard of the revolution, the study says, could see their own revenues double as a result of a shift in the economy’s tectonic plates more profound than the result of the invention of the steam engine.

The report also heralds the mainstream application of AI-based software and robotics, with the prediction that as many as 70% of all companies will have introduced some form of the technology within the next decade. However, despite the overall boon to global wealth that AI will bring, the study recognises that it will not come without upheaval. The labour market will change, with jobs based on repetitive tasks being taken over by machines. ‘Less advanced’ employment opportunities will see their share of the overall workforce drop from the current 40% to 30% over the next decade and a bit. However, at least part of the slack will be picked up by roles that are “cognitively driven and require more digital skills”.

The report is generally optimistic and posits the hope that, overall, net employment may not be significantly impacted from the shift. However, repetitive jobs in developed economies, where wages are highest, are likely to face the most immediate threat to their existence as the incentive to replace these positions with automation is both higher and the initial capital requirements of doing so more readily available.

The big unanswered question raised by the report is how the additional wealth generated by the mass adoption of the latest technology in the world of AI and robotics would be fairly distributed. The fear is that rising GDP and falling employment opportunities for ‘less advanced roles’, could lead to widening inequalities in wealth distribution. Hopefully an AI algorithm will help manage that risk effectively!

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