If the Goldman Sachs report comes to pass, the global GDP could see a significant rise thanks to generative AI. Released on April 5th, the report details the potential of AI to bring sweeping change to the global economy as a whole. Much of this is due to the advances in NLP work which is being used by companies for a variety of purposes. This is partially in line with another report from Goldman Sachs that claimed that upward of 300 million jobs could be impacted by AI.
But what is the overall increase in terms of numbers? Well according to the report, the global economy could see a whopping $7 trillion dollar increase thanks to the emerging technology and its ability to be quickly scaled into multiple industries despite some worries.
Goldman Sachs economists Joseph Briggs and Devesh Kodnani said as much in their report. “Despite significant uncertainty around the potential for generative AI, its ability to generate content that is indistinguishable from human-created output and to break down communication barriers between humans and machines reflects a major advancement with potentially large macroeconomic effects.”
With just that piece of information, would conclude that AI’s introduction into the labor market will be an overall negative disruptor in the labor market. Some tech leaders, such as Microsoft CEO Satya Nadella, disagree and claim otherwise. They see AI as an overall enhancer for human abilities, not a means of replacing workers. But which side is right and what will AI’s impact be on labor overall?
Well in the same report, the authors make the case that AI will help the worker, not replace them. Saying in part, “Although the impact of AI on the labor market is likely to be significant, most jobs and industries are only partially exposed to automation and are thus more likely to be complemented rather than substituted by AI.” But they also conclude that some automation will eliminate jobs.
With that said, the report’s authors look to historical examples, and point out that jobs displaced by machines and automation have, “historically been offset by the creation of new jobs, and the emergence of new occupations following technological innovations accounts for the vast majority of long-run employment growth,“. It’s much like the transition from the industrial revolution. Though many agricultural jobs were displaced, more mechanically inclined ones took their places; which in the long term rose the standard of living for the common worker.
But there is more. Kash Rangan, senior U.S. software analyst in Goldman Sachs Research, also wrote in the team’s report, “Generative AI can streamline business workflows, automate routine tasks and give rise to a new generation of business applications.” This growth in SAAS could in turn be a new economic entry for both workers and businesses.
Though the report paints a colorful picture of the future of AI, not all agree. Many within data science and public policy have signaled their concerns with the rapid ascendance of AI over the last year. Though there are calls to “pause” the development of LLMs more powerful than OpenAI’s GPT-4 due to concerns of privacy, economic uncertainty, and labor disruption, this is unlikely to happen.
Either way, 2023 is fast becoming the year of AI.