In February 1966, Time magazine published an essay that predicted that within the near-term future, “not only manual workers, but also secretaries and most middle-level managers will have been replaced by computers. The remaining executives will be responsible for major decisions and long-range policy. According to one estimate, only 10% of the population will be working, and the rest will, in effect, have to be paid to be idle.”
Well, a funny thing happened on the way to the future. Work didn’t disappear because of computers – if anything, it created new kinds of work, or opportunities, and lots of them. Just ask anyone working past midnight on their computer to finish up their latest project initiatives. Or pouring through reports and spreadsheets while on a plane. Computers have made everyone busier, and well beyond the 9-to-5 mold.
Lately, there is renewed talk about replacing everyone with computers, especially as the artificial intelligence wave sweeps in. However, the data – and common sense – tells a much different story, something more akin to the world that evolved after that February 1966 essay.
David George, partner with venture-capitalist firm Andreessen-Horwitz, for one, expects AI to gradually unveil new roles and opportunities that are just out of our line of sight. The current labor situation is not a “freeze frame” in a movie, he writes in a recent note. Rather, it’s a constantly evolving world. Innovation and technological progress never rose through simple one-to-one replacements of existing ways of doing things. The presumption that AI is going to simply replace human jobs one-to-one is “not only a massive failure of imagination, but of basic observation,” George says.
Yes, AI will change tasks and jobs – and that’s to be expected, he continues. “The shape of the labor market will change, as it always does when a transformational technology is unlocked. But the claim that AI will produce economy-wide, permanent unemployment is unhelpful marketing, bad economics and worse history.”
Bear in mind that the author of these proclamations, David George, is partner in one of the world’s leading investor in what are now AI-driven ventures, so there’s a certain positivity toward new innovations that accompany such a role. Still, his perspective provides a front-row view of the economy of the decade ahead.
The proof is in the data. Currently, “measures of exposure, automation, and augmentation show no sign of being related to changes in employment or unemployment,” George relates. At the same time, the data available on AI and employment is incomplete.
The Yale Budget Lab, cited by George, states that predictions about AI’s impact on the current labor market are “largely speculative.” For now, the data “largely reflects stability, not major disruption at an economy-wide level. The job mix for AI appears to be changing faster than it has in the past, although not markedly so.”
George brands much of today’s hysteria about job displacement as the “lump-of-labor” fallacy, which claims current levels of work will remain the same, a zero-sum trade-off, meaning that tasks can simply be swapped between humans and AI agents. “It assumes a zero-sum competition between existing workers, and anyone or anything that may do the same job – whether that’s other workers, machines, or in this case, AI.”
If anything, productivity gains should “increase demand for labor, because labor becomes more valuable,” he notes. Instead of cutbacks, more productivity and innovation arises – and therefore, more demand for talent. For proof of increased productivity, look at hiring growth in both software engineers and product managers, he illustrates. “If AI substituted thinking 1:1, then you might plausibly expect, ‘PMs need fewer engineers,’ or you could argue ‘engineers need fewer PMs,’ But that isn’t what we see. We see demand for both continuing to rebound, because what matters is people are getting more work done.”
“Automation strips out the repetitive layer and pulls human work up the stack,” he relates. “The reason why is simple: humans want to expand! When one layer of scarcity falls, people move up to the next one. When food gets cheaper, we spend more on housing, health, education, travel, entertainment, convenience, pets, safety, beauty, and longevity.”
The same thing happens in labor markets, he continues. “New work keeps appearing because human ambition does not stop, and conquering old frontiers reveals new frontiers to conquer. New business formation is already exploding, with a pretty decent correlation to AI adoption.”
