One could argue that 2023 marked the year AI fully entered the public consciousness as a transformative technology poised to permanently alter our lives and livelihoods. Before OpenAI’s launch of ChatGPT in November 2022, artificial intelligence often seemed relegated to the realm of science fiction despite the presence of digital assistants like Siri and Alexa.
The rapid adoption and media coverage of ChatGPT sparked both excitement and anxiety as people grappled with the implications of AI streamlining tasks traditionally performed by humans. While the efficiency and profitability AI brings to companies are undeniable, there are valid concerns about its impact on employment.
Fear of Artificial Intelligence (AI) and robots automating many jobs has grown as technological change accelerates. Some studies predict that in the next 20 years, 40-50 percent of U.S. jobs could be automated, prompting concerns about forced early retirement. According to an Oxford study: “47 percent of U.S. workers are highly likely to see their jobs automated over the next 20 years.”
Historically, technological advancements have led to job displacement but also the creation of new jobs, maintaining overall high employment. This time, however, feels different because real wage growth has stagnated for many, failing to improve living standards. Increased productivity through automation and globalization has seen the share of GDP in labor decrease. In contrast, the share in capital has risen, making it more beneficial to be an investor than a worker unless one has specialized skills.
Is this Fear Necessary?
Some experts argue that fears around AI and robotics are overblown, suggesting that while some jobs may be automated, they will be replaced by more interesting and creative roles. They dismiss the fear of the Singularity, a concept popularized by Ray Kurzweil, which predicts rapid advancements in AI leading to a future where machines surpass human intelligence:
- By 2030, the Singularity will occur, and runaway AI will emerge.
- By 2050, a $1,000 computer will have the processing power of all human brains.
While these predictions may seem alarming, the reality is that technologies like self-driving cars will likely take longer to fully integrate into society. The jobs most at risk are often mundane and repetitive, paving the way for more fulfilling work.
The Historical Context of Job Displacement
During an event showcasing the Mitra robot, a doctor expressed concerns that robots were killing jobs for receptionists and security personnel. The response highlighted a broader historical perspective: technological progress has always led to job displacement, starting with the medical profession. Modern medicine has eradicated diseases and marginalized shamans and traditional healers. Similarly, the agricultural revolution, which began around 12,000 years ago, drastically transformed human labor. Before agriculture, humanity’s primary job was hunting and foraging. The advent of farming allowed a single farmer to produce more food than many hunters, leading to the rise of civilization and a plethora of new professions such as pottery, painting, urban planning, and medicine.
The Industrial Revolution followed a similar pattern. Innovations like steam power and locomotion displaced many traditional jobs, created new opportunities, and improved living standards. People who once feared the displacement caused by computing in the 1970s could not have predicted the new industries and job roles that emerged over the next four decades.
AI’s Impact on Industry
AI innovations, including the retirement sector, are reshaping industries at an unprecedented pace. Third-party administrators (TPAs) are beginning to leverage AI to enhance efficiency in ways previously unimaginable. For example, tasks that were once automated through basic programming—such as generating quarterly statements—are now becoming more sophisticated with AI’s ability to interpret and process data without human intervention.
Increased automation and accuracy are significant benefits of AI. Traditional automation required human engineers to program specific tasks, which the machines would execute. AI, however, eliminates the need for detailed human instructions by understanding and interpreting data autonomously. This shift leads to nearly 100% accuracy, a notable improvement over human error rates.
Working in Tandem: AI and Humans
Despite AI’s capabilities, human involvement remains essential in many processes. AI serves as a productivity enhancer, not a replacement for professionals in the retirement business. While AI excels at tasks involving memorization and data processing, humans are better at making nuanced decisions and providing emotional context—critical aspects of client interactions.
AI can significantly enhance client communication. For instance, an AI program can recall previous interactions with a client, providing relevant information to make conversations more meaningful and efficient. This capability reduces call preparation time, allowing professionals to focus on building relationships and addressing client needs more effectively.
Democratizing Innovation
The scale of AI implementation is a crucial factor in its adoption. Larger firms with extensive resources have traditionally been able to invest in advanced automation technologies, creating efficiencies and reducing costs. However, smaller TPAs often struggle with the capital expenditure required for such upgrades.
Companies like Microsoft are democratizing AI by integrating it into widely used platforms like Microsoft 365. Features such as AI-powered Copilot make advanced AI tools accessible to smaller firms, enabling them to compete on a more level playing field. At PensionPro, partnerships with experts and ongoing research into AI developments are helping deliver cutting-edge automation solutions to early adopters in the retirement industry.
Embracing AI’s Potential
The hype surrounding AI is mostly warranted, but the accompanying doom and gloom can be overstated. AI solutions are poised to make retirement more efficient and cost-effective, yet human expertise will remain vital in planning and execution. Innovations in AI are not about replacing jobs but enhancing their ability to perform, freeing professionals to focus on higher-value activities and improving overall job satisfaction.
Addressing Common Fears and Embracing the Future
Concerns about AI often stem from dystopian narratives in movies like “The Matrix” and “Terminator.” However, these fears are no more justified than any other technology. Useful technologies inherently come with risks, but they are indispensable to progress.
Robotics has the potential to address numerous real-world problems, from enhancing safety in hazardous environments to improving the quality of life for the elderly and aiding in rescue operations. These applications illustrate the transformative potential of robotics, which, like past technological advancements, can lead to significant societal benefits.
The Future of AI and Robotics
AI and robotics should be viewed as the latest stage in this ongoing evolution. Robots are no different from any other machine—they destroy no more jobs than washing machines or music players did. Even in the worst-case scenario of a general-purpose AI capable of performing all human tasks, the impact would be akin to the agricultural revolution, opening up new fields of human endeavor.
Instead of eliminating human interaction, AI and robotics can enhance it. For example, in video games, bots often outperform humans, which does not deter human players. Similarly, AI could free people to engage in more creative and fulfilling activities, spending more time with loved ones and exploring new interests.
In conclusion, AI and robotics represent the next stage in a long history of technological evolution that has consistently led to challenges and opportunities. By embracing these innovations, we can work towards a future where technology serves humanity in unprecedented ways, enhancing our capabilities and improving our quality of life.
