“AI is the Industrial Revolution of knowledge work, transforming how all workers can apply information, create content, and deliver results at speed and scale,” said the “2024 AI Jobs Barometer,” a report from the professional services firm PwC. With the AI Jobs Barometer, PwC set out to find empirical evidence of the impact of AI on jobs.
PwC analyzed over half a billion job ads from 15 advanced economies, including the US, Canada, Singapore, Australia, New Zealand, and 10 Western Europe countries, as it looked for concrete evidence of AI’s impact on jobs, skills, wages, and productivity. It tracked the growth of jobs that demand specialist AI skills across countries and sectors to figure out the degree of AI penetration.
Overall, PwC found that AI penetration is accelerating and that workers with strong AI skills command significant wage premiums. Moreover, AI’s impact isn’t limited to only those workers who have specialist AI skills.
“Many, if not most, workers who use AI tools in their work do not have or need these specialist skills. For example, a limited number of workers with specialist AI skills may design an AI system or tool for a company that is then used by hundreds or thousands of the company’s customer service agents, analysts, or lawyers — none of whom have specialist AI skills.” In fact, one of the major features of generative AI applications is that they can typically be operated using simple everyday language with no technical skills required.
Let me summarize the key findings of the 2024 AI Jobs Barometer.
Good news for the global economy
AI is driving a productivity revolution. Labor productivity growth has been quite sluggish in most OECD countries for almost 20 years. More recently, there’s been much speculation that AI might be able to supercharge workers’ productivity and thus increase economic growth. To understand the impact of AI on productivity, PwC analyzed all jobs based on their level of so-called “AI exposure.” A high level of AI exposure means that AI can be particularly appropriate for some tasks in those occupations. “The analysis revealed that sectors with higher AI exposure are experiencing much higher labour productivity growth.”
Not surprisingly, knowledge-based occupation have the highest levels of AI exposure, and are thus seeing high demand for jobs that require advanced AI skills. Financial services has a 2.8x higher share of jobs requiring AI skills compared to other sectors, professional services has a 3x higher share of AI jobs, and information & communications has a 5x higher share of jobs looking for AI talent. Overall, sectors with high AI penetration are seeing almost fivefold (4.8x) greater labour productivity growth.
AI is helping to ease labour shortages. AI-based productivity could help ease acute labor shortages in a number of occupations, like customer sales and service, administrative and commercial managers, and IT and business professionals. Those jobs are still growing, but 27% more slowly on average. Given that many nations, especially the more advanced OECD economies, are facing shrinking working age populations and labor shortages in many sectors, AI can help ensure that the labor supply is available for their economies to reach their full potential.
AI specialist jobs command up to a 25% wage premium on average. Since 2016, the demand for jobs with AI specialist skills have outpaced growth in all jobs. These jobs command a wage premium, underlining the value of AI skills to companies. The average wage premium across all jobs is 25% in the US, 14% in the UK, 11% in Canada, 7% in Singapore, and 6% in Australia. Data base designers and administrators command the biggest premium in the US (53%) and the UK (58%), evidence that data is becoming increasingly critical to business success in the AI era. Financial analysts command a 33% wage premium in the US and 32% in the UK, the premium for lawyers is 49% in the US and 27% in the UK, and that for sales and marketing managers is 43% in the US and 14% in the UK.
A disruptive jobs transition
Skills required for AI-exposed jobs are changing fast. While old skills are disappearing from jobs, new skills are appearing for AI-exposed occupations at a 25% faster rate than for occupations less exposed to AI. “Growth in jobs that require AI specialist skills has outpaced all jobs since 2016 (well before ChatGPT brought fresh attention to AI), with numbers of AI specialist jobs growing 3.5 times faster than all jobs.” Workers need to develop the skills that are necessary to embrace the opportunities that AI brings.
Some of the skills rising in demand complement AI or are relatively immune to AI disruption.
“Some of the skills rising fastest in demand are those which cannot easily be performed by AI.” The PwC report includes examples of the fastest growing skill categories due to their low AI exposure. These include:
- Performing Arts, Sports, and Recreation (+155% growth), — e.g., creative arts, sports instructors, yoga teachers.
- Personal Care and Services (+82%), — e.g., child care, skin treatments, funeral arrangements.
- Energy and Utilities (+58%), — e.g., solar development, water metering, energy trading.
- Environment (+48), — e.g., waste collection, flood controls, sediment sampling.
Sharp declines in demand for some AI-replaceable skill. On the other hand, there is a sharp decline in employer demand for occupations whose tasks are highly exposed to AI automation. The slowest growing skill categories include:
- Information Technology (-26% decline), — e.g., cloud operations, Javascript coding.
- Design (-23%), — e.g., visual effects, computer graphics, interface design.
- Sales (-20%), — e.g., consumer sales, online auctions, cold calling.
- Analysis (-14%), — e.g., regression analysis, data synthesis.
There’s no going back to yesterday’s jobs market - but vast opportunities await those who adapt to an AI age
“Many who predict AI will cause a sharp decline in job numbers are asking the wrong question. Those who predict AI will have a negative impact on total job numbers often look backward, asking whether AI can perform some tasks in the same way as they have been done in the past. The answer is yes. But the right question to ask is this: How will AI give us the power to do entirely new things, generating new roles and even new industries?”
The final section of the PwC report includes a set of key steps that policymakers, business leaders, and workers should take to help realize the promise of AI.
“Policymakers can encourage the use of AI to grow productivity and prosperity, for example by building the supportive policy environment, digital infrastructure, and skilled workforce to help realize AI’s potential. … Policymakers can support workers with training/retraining and safety nets, and shape the education system to help prepare workers for an AI age in which critical thinking, creativity, and adaptability are likely to be key skills. Finally, policymakers can strive to make sure that growing prosperity from AI adoption is widely shared.”
“Business leaders can embrace, experiment, and create new uses of AI. They can think beyond using AI to do things the way they have been done in the past and instead use AI to generate new ways to create value. … Business leaders should view AI as a complement to people that is best used with human oversight. Leaders should track the ever-shifting ‘jagged frontier’ which marks where AI performs brilliantly versus where AI lacks capabilities or works best with human assistance.”
“Workers, for their part, should embrace AI, experimenting with it and seeking ways it can complement and enable them in their work. Workers should build the skills to be sought after in an AI age (for example, skills that either complement AI or are hard for AI to do). … Like past technological revolutions from electricity to internal combustion engines, AI is changing what it takes for workers to succeed — and those who adapt may enjoy vast new opportunities.”
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