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AI & The Era of Ever-Evolving Employment
As humans confront the machines rapidly racing to replace them, how will advances in AI impact our corporate constructs and, more importantly, the communities of workers who comprise them?
The optimist in me likes to think that what doesn’t kill you makes for a great lesson. As a result, I often find myself almost fondly reminiscing on one of the darkest and dreariest years of my life – the year I spent in investment banking.
During those exhausting evenings returning home dejected from the taxing, toneless, and—at times—terrifically terrible banking bullpen, I was often reminded by my roommate (who also happened to be my mother) that I had it good. “Back when I was in your seat, we were juggling our attention between the fax machine and Lotus 1-2-3.” Was this woman a dinosaur?
While it seemed almost unfathomable that life as an Analyst could be any more miserable, technology’s ability to radically transform the average worker’s toolkits and workflows in a fairly short period of time was already abundantly apparent.
Today, advancements in AI are propelling similar and significant changes, reshaping the labor market as we know it. While the “who” and the “how” remain up for debate, the market is quickly coming to a shared understanding that AI will fundamentally transform the way we work and the skills people need to succeed professionally.
It’s well understood that these new models are incredibly powerful in their abilities to improve productivity across a wide variety of jobs, but many investors have yet to discuss the second- and third-degree implications for the workers themselves.
As we collectively reckon with the new balance of power between humans and the machines rapidly racing to replace them, it is worth exploring how AI advances will truly impact our corporate constructs and the communities of workers who comprise them.
The Woes of the White-Collar Workforce
Despite record-low national unemployment rates, white-collar organizations have already begun shedding seats as they realize they can do more with far less from a human capital perspective. With even best-of-breed businesses reducing headcount by 10–20% in the past 12 months, we are witnessing a broad-based correction in the number of people required to get the job done. With Goldman Sachs estimating that generative AI will disrupt or displace as many as 300 million jobs, it feels like this ongoing shrinkage will become the new normal.
As AI dramatically enhances productivity at the per-worker level, companies are realizing that it may be easier to retrain their models than to retrain their workforce. As a result, millions of full-time white-collar positions will cease to exist, particularly those in undifferentiated production capacities like entry-level marketing managers, copywriters, financial analysts, legal assistants, and other jobs that can arguably be done faster, cheaper, and even better by machines. While some of these displaced individuals will likely transition out of the confines of corporate America entirely, many will move into new roles that are born as a result of the ongoing AI revolution.
As companies continue to build out these new operating teams and the underlying technologies evolve at an accelerating pace, businesses will likely lean on networks of high-value, specialized contractors to handle the intermittent spikes in differentiated demands that the machines themselves are incapable of handling.
The Trade Renaissance
While those looking for their next customer-success gig might be struggling today, labor tightness remains a critical economic constraint at the national level—particularly in the trades. The skilled-trades, or careers ranging from roofers to auto technicians that involve hands-on applications of a particular skill set generally acquired by specialized training and education, today present a shorter timeline to a six-figure paycheck with far less disintermediation risk in the near to medium term due to their hands-on nature.
In many ways, the numbers speak for themselves when it comes to stratifying career prospects: Skilled-trade industries are projected to increase by 10% over the next five years, and a growing base of Boomer trade workers expect to retire over the coming decade. Interestingly, much of the surge in demand for trade workers also aligns with younger generations’ interest in all things climate-related and delivering value back to their communities.
With the ongoing electrification of everything driving new demands in fields like solar, battery storage, electric vehicles, and alternative energy, an estimated 14 million net new jobs are expected to be created in the coming years. Thanks to improvements in vertical software that simplify the process of opening and financing a business and streamline ongoing operations through material reductions in non-billable hours, tradesmen are increasingly able to orient their attention towards their actual field work. With many of these jobs becoming increasingly technical as a result of the broader electrification transition, they offer far greater intellectual stimulation—and opportunity—than ever before.
Lifelong Learning
As we turn the corner on Industry 4.0, the days of lifelong employment appear to be coming to an end. Instead, we’re entering an era defined by ever-evolving employment, where adaptability and continuous learning are paramount. As AI continues to automate tasks, the demand for workers with new skills will grow, and workers will be required to constantly learn and adapt to stay relevant and employable.
While some of these retraining efforts will be driven at the federal and municipal levels (like recent progressive efforts in Phoenix to reorient the city’s workforce towards in-demand advanced manufacturing capabilities), much of the onus is likely to fall upon workers and their communities. Online training programs and community-led coaching appear likely to become increasingly ubiquitous. As a result, expert-led professional development will no longer end at graduation and will instead extend until retirement.
Entrepreneurialism in the Era of Ever-Evolving Employment
With these seismic shifts, we will also be forced to embrace a more flexible approach to work. Today, the average worker has 12 jobs over the course of their lifetime — and if the data is any indication, this number should increase considerably as millennials and Gen Z comprise a greater and greater percentage of the working population.
As jobs become more automated, the need for full-time, permanent employees will decline. Instead, while some workers will elect to work on a contract basis for more traditional employers, others are likely to find themselves exploring more entrepreneurial opportunities as the technology displacing them similarly enhances their operational toolkits as owner-operators.
With the cost of starting and operating a business declining with the introduction of each new AI application, those hungry for growth and opportunity appear increasingly likely to find it far beyond the confines of constricting white-collar corporations, either in the form of franchises or as truly self-owned and -branded operations.
Allen F. Morgenstein, an industrial engineer who pioneered the idea of the work-simplification process, once said and later popularized the saying, “Work smart… not harder.” In a world where productivity is increasingly driven by machine-driven workflows, the idea of overall output optimization is shifting from a nice-to-have consideration to a need-to-embrace reality.
While AI’s engulfing of the white-collar world certainly brings challenges, it also presents opportunities for growth, innovation, and transformation across organizations—and perhaps even more impactfully, for individual workers. By embracing changes in professional direction, upskilling, and ever-evolving scopes of work, workers from all walks of life should be able to thrive in this new era of AI.
If you’re similarly inspired by the potential for transformational technologies and platforms for connectivity to bridge the ever-expanding gap between workforce skills and professional demand, we’d love to hear from you. Subscribe below for more or follow me on Twitter at @itsmeeraclark.
Totaly agree, thats why we need to develop our Agile intelligence, I recommend this book!!!
https://a.co/d/bWThMSU
wonderful, insightful article Meera. I laughed out loud at the end of your second paragraph. The remainder of your essay was clear and informative. Best of good fortune to you in your unfolding journey.