Eric Gastfriend is Executive Director of Americans for Responsible Innovation, and Cofounder & President of DynamiCare Health.
When it comes to AI’s impact on the economy, there are two camps. In one camp, many economists reassure us that jobs lost to artificial intelligence (AI) will be offset by new ones. In the other, technologists warn that AI will provide a universal worker that displaces vast swaths of the workforce.
It doesn’t take an economist or a technologist to realize these two forecasts are worlds apart. So, what should we make of the far-ranging predictions on AI’s workforce impacts? And why the gap?
My company, Americans for Responsible Innovation, found that economists may be underestimating the scale and speed of AI-driven workforce disruption, with mainstream economic models of general-purpose technology failing to account for AI’s unprecedented flexibility.
McKinsey, for example, estimates that about 30% of current work hours could be automated by 2030, a massive labor disruption. However, the firm concludes that new jobs will result in net gains. It’s a traditional approach to forecasting the workforce impacts of new technology: subtract jobs automated away, add new jobs and find the net difference.
But it’s an approach to understanding economic change that may now be outdated. Technologists in Silicon Valley envision something far more revolutionary. To them, AI will play the role of a universal worker that can not only absorb work in multiple sectors but also can take on new jobs that would otherwise offset losses.
The old paradigm—that technology will always create new jobs for workers at a faster pace than it eats old jobs—may no longer hold. Among AI researchers, twice as many think AI will lead to fewer jobs rather than more. Among the general public, the jobs outlook “gloom” to “boom” ratio is nearly 13 times.
With trouble on the horizon for our workforce, policymakers need to start thinking big. History shows that when technology upends labor, leaving the market to sort it out isn’t enough. Bold public policy is indispensable.
Americans saw major economic disruption during the Second Industrial Revolution with electrification, mass production and automation. The United States reacted by heavily investing in K-12 to reshape how children learn and make education more accessible to the public. This response played a pivotal role in enhancing the American worker, raising standards of living and promoting U.S. leadership in the 20th century.
A decade later, America again faced an employment shock: millions of World War II veterans returning home in search of work. Rather than let the chips fall where they may, Washington enacted the G.I. Bill—a massive investment in human capital. By 1956, 8 million veterans had used their G.I. Bill benefits to attend college or job training programs and transition back to the civilian workforce.
AI’s impact threatens to create a similar wave of workforce transitions and on a much faster time scale. But unlike in the 20th century, few lawmakers from either party have yet to come forward with ideas that match the scale of potential disruptions.
As an entrepreneur and CEO, I know leaders in the business community have special insight into the coming economic transformation. Business leaders have an economic incentive to see around the next corner and anticipate the impacts of technological change. Many CEOs in the tech world at businesses, from DuoLingo to Klarna, have already begun restructuring their workforce.
In addition to the importance of keeping our companies ahead of tech developments, those of us in the business community have a responsibility to communicate the economic reality we see on the ground to lawmakers shaping federal policy. As executive director of Americans for Responsible Innovation, I’ve talked with policymakers in Washington about the need for responsive action that will address the workforce impacts of AI.
However, there’s room for more business leaders to chime in. From local chambers of commerce to Silicon Valley’s tech leaders, entrepreneurs often have a special line to policymakers. Now is an essential time for the C-suite to use that line to communicate the urgency of crafting labor policy that will educate, retrain and support workers during this period of transition.
Communicating the pace of change to lawmakers isn’t just good policy for workers—it’s good for business. To remain ahead of the competition in the AI era, it’s important our workforce is prepared to excel at the new jobs AI creates.
We know from history that proactive, ambitious policy can turn a workforce challenge into an opportunity. With the right public policy, AI’s impact could be even more dramatic than past upheavals, and it’s unfolding at digital speed.
To meet the moment, the business community and Congress must think big. America overcame past economic upheavals by embracing bold solutions; we must do so again so the age of AI delivers shared prosperity—not a jobs crisis. For the entrepreneurs with front-row seats to these changes, it’s up to us to share what we see.
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