According to this research, fears that the use of AI applications by businesses would lead to widespread job losses have not been confirmed so far.

Changes in the labor market are already taking place and are expected to intensify as AI adoption gradually expands, starting with larger companies that have the resources to invest in such technologies.

However, overall employment may actually increase rather than decline as a result of these changes.

On one hand, demand is decreasing for roles that can be replaced by generative AI models. On the other, demand is rising for new roles related to AI.

Global research points to new job creation

According to research by the World Economic Forum, AI is expected to create 69 million new jobs by 2028.

These roles require skills in areas such as data analysis, machine learning, and software development, highlighting the importance of education through university studies and reskilling programs.

The main argument supporting the idea that overall employment will grow is the increase in productivity driven by AI, which is already noticeable and expected to rise further.

Higher productivity typically leads to higher real wages and stronger economic activity, which in turn supports employment levels. This pattern has been observed during past technological transformations and is likely to continue.

McKinsey & Company, for example, estimates that AI could contribute up to 13 trillion dollars to the global economy by 2030.

According to research by the Center for Economic Policy Research, based on 12,000 European companies, AI has increased productivity by an average of 4%, although the benefits are unevenly distributed. Larger and mid-sized companies, as well as those able to integrate AI into their operations and workforce, have seen the greatest gains.

Morgan Stanley also expects AI to boost productivity and real wages.

It notes that unemployment has increased slightly among groups more exposed to AI.

Unemployment among young people aged 22 to 27, who are more likely to work in roles that can be automated, has seen the largest increase since 2023 in occupations most vulnerable to AI.

Excluding this age group, however, there is little evidence of widespread disruption in the labor market. Still, one concern remains: during earnings calls, companies are increasingly referencing job cuts due to AI rather than job creation.

Economists at Morgan Stanley analyzed five major waves of innovation in the United States, from the Industrial Revolution to the internet era, to measure their impact on the economy and employment. They found that technological change has historically strengthened rather than reduced overall employment.

During the Industrial Revolution, productivity in the US economy increased by about 0.84% annually between 1800 and 1850.

Employment in agriculture declined from 75% to just over 50%, while jobs in manufacturing and construction more than doubled between 1820 and 1850.

In the era of steam, railroads, and steel, often referred to as the Second Industrial Revolution, productivity growth approached 2% annually by the late 19th century, double that of the first Industrial Revolution. Agricultural employment continued to fall, reaching 30% by 1910, while manufacturing employment surged.

During the age of electricity and automobiles, productivity across the US economy grew by an average of 1.5% between 1909 and 1929, while productivity outside agriculture doubled. Agricultural employment declined further, while public sector jobs nearly tripled between 1910 and 1950.

In the era of electronics and aviation, productivity grew between 2.5% and 3% annually, and the services sector became dominant.

Finally, in the age of the internet and digital networks, productivity accelerated to around 3% annually between 1990 and 2000, alongside growing demand for workers in software, data science, and cybersecurity.

Source: cnn.gr