One of the most common fears about AI adoption is how quickly it will replace human jobs. Even though this underlying fear is widely discussed, it doesn’t hold much water when listening to economic experts like Dr. Stephen KingCommissioner of the Australian Productivity Commission, who spoke at the recent SAP NOW event in Sydney.

Using his country’s economic data as a backdrop for many important what-if scenarios, King convincingly lays out why AI won’t replace too many jobs. In fact, King argues on the contrary that AI will be a game-changer, not only by eliminating redundant and boring tasks, but also by reversing stagnant productivity gains in Australia and other developed countries.

Identify latecomers

To understand whether AI makes sense to help increase worker productivity, we must first consider the current, very worrying situation for Australians. Since around 2015, the country’s labor productivity has remained completely stable.

“We basically have the same level of labor productivity today as we did ten years ago,” King said. “So if you think about a lost decade, we just had one.”

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King is quick to add that many other developed countries around the world face the same problems. Why is this a problem? With the cost of living increasing, everyone wants to earn higher incomes to maintain or increase their standard of living, and it is impossible to achieve this without increased productivity. With 90% of Australians employed in the services sector, these sectors are precisely those that are lagging behind.

“The biggest laggards in terms of productivity are non-market services or government-funded personal services, such as education, health, disability, elderly care; sectors and services where demand is increasing over time due to an aging population,” King said. “If we don’t address these areas of non-market services in general, we won’t have better standards of living. It’s that simple.

Apply AI where it counts

While it may be easy for some to see how AI can improve certain sectors of the economy, it is just as easy to understand concerns about the displacement of people in those sectors. This raises an important question: to what extent will AI improve or eliminate jobs?

King believes that AI is the first general-purpose technology with the potential to completely transform services. And thinking about industrial revolution type transitions of the past, they’re based on things like electrification and different energy sources.

“AI is going to make a huge difference in service industries,” King said. “Will this mean that robots will come and take our jobs? Certainly not. In the service sector, AI will make some jobs redundant, but probably not many, and probably not to a degree that we should really worry in terms of societal dislocation. »

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King thinks some machines will take over some tasks, but it’s more likely that machines will take over some of them thanks to AI.

“The key will be to remove the boring, repetitive and mundane elements, allowing humans to be more creative and improving innovation and productivity. »

The King’s Productivity Commission has conducted research into the impact of AI in the healthcare sector. And the big impact in the healthcare sector has been to remove many of the boring administrative and routine tasks from healthcare workers, allowing them to spend more time with patients and on what they want to do.

“These savings were estimated at 11 hours per week for each health worker. Considering health accounts for around 10 per cent of Australia’s GDP, the impact on productivity across the economy as a whole is enormous,” King said.

According to King, the organizations that will win through AI will be organizations (similar to healthcare) that have an internal culture of willingness to experiment by doing things differently and to curate those experiments internally.

“It’s a question of leadership within the organization to try to recruit those who are very happy with the way things have been done and show them how their lives can be better by doing it differently.”