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AI and the labor market: “Many companies will question their own large IT staff”

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AI and the labor market: “Many companies will question their own large IT staff”

Generative artificial intelligence (AI) systems such as ChatGPT and Midjourney, which generate new texts, images, music or videos on the basis of existing works and models trained with them, are currently demonstrating their effectiveness for a wide variety of practical applications. It stands outthat you also change the world of work massively. The new “Code Interpreter” service from ChatGPT developer OpenAI shows “where the journey is headed,” Constance professor for economic policy, Sebastian Findeisen, gives an example. He is certain: “It will be possible to automate much more in software development and data analysis in the next few years.”

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Several scientists surveyed by the Science Media Center (SMC) on the complex of AI and the labor market agree: In contrast to past technological innovations, the effects of generative AI are likely to affect job profiles with higher educational qualifications and income to a particularly high degree this time. “Many companies will ask themselves whether they really need a large IT staff of their own or just a few people who use AI to keep the company’s software running,” predicts Findeisen. However, it often took years for many companies to find ways to “productively integrate new technologies into their processes”. Until then, everyone involved would have time to “implement adjustments so that layoffs can be avoided”.

Findeisen also refers to the “relative lack of IT experts in relation to the current demand” in this sector in Germany. Even increasing automation in the IT sector will therefore “hardly lead to mass unemployment”. It is also likely that “well-positioned software and hardware manufacturers will initially benefit” from the current AI wave. These included big tech companies such as Google’s parent company Alphabet, Amazon, Apple, Meta and Microsoft, but also smaller companies. These are located in particular in the USA and partly in Asia and “will primarily create profiteers there”.

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AI will probably increasingly take on tasks “that were previously not or less affected by automation,” confirms Georg Graetz, professor at the Institute for Economics at Uppsala University. This included translating, creating texts, graphics and music, and driving vehicles. However, it is not yet clear “whether it will mainly be replacing or complementing tasks”. If AI is used as an aid, less skilled workers in particular should benefit. If there is an “intrinsic appreciation” for human work, such as in personal services, in crafts, in art and entertainment, the corresponding professions are not threatened by AI.

Graetz finds it difficult to imagine “that AI will result in an overall loss of income”. Rather, higher productivity should lead to higher earning potential, “whereby the question of distribution arises.” Melanie Arntz, Heidelberg Professor of Labor Economics, also assumes that “more complex, analytical activities – such as those of financial analysts, mathematicians, lawyers – could be changed to a large extent by AI applications”. Wherever information has to be collected, processed and passed on in a structured form, there is great potential for new language models.

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“But that doesn’t automatically mean that the professions and jobs affected will be replaced,” emphasizes Arntz. “In many professions there will only be a new division of labor between man and machine.” Jobs “that are increasingly in demand in this change” are relatively safe. These are data scientists, for example. However, the wages of university graduates are likely to vary further. Nursing professions, for example, are also little influenced by AI.

“Cognitive activities will be affected more than before,” says Wolfgang Dauth, senior researcher at the Institute for Labor Market and Vocational Research at the Federal Employment Agency. “Examples are driving vehicles, bookkeeping, but also very demanding activities such as programming software or medical diagnostics.” Within a profession, people would specialize in the non-automatable activities that require social interaction and creativity. This increases productivity. Doctors, for example, could leave the evaluation of CT images to the AI ​​and thus better care for more patients. Only a few professions that rely entirely on automatable activities will disappear entirely. This includes Dauth, for example, “engine driver or truck driver”.

In order to cushion the transformation, “labor market policy should develop scenarios,” demands Graetz. For example, the consequences of “a rapid spread of automatic vehicles” would have to be considered. In addition, the government must develop strategies together with trade unions and employers’ associations so that the introduction of new technologies does not cause social upheaval and lead to widespread loss of prosperity. Various types of market failures justified “state interference” here. Arntz adds that Germany must first catch up on its gap in digitization in general. This is the only way to create “framework conditions for a broad use of AI”. These are necessary to maintain competitiveness.

Federal Interior Minister Nancy Faeser and Labor Minister Hubertus Heil (both SPD) see an urgent need for action. In the summer they wanted to present a draft for an employee data protection law to regulate the monitoring, control or selection of employees by AI, writes the “Süddeutsche Zeitung”. Employers should not be allowed to create “complete movement and performance profiles”, according to a key issue paper by the two departments. AI-supported application programs would have to comply with scientific standards and should only check characteristics that are important for a position.


(tiw)

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