The worldwide boom in generative artificial intelligence (AI) is to usher in an age of accelerated productivity and greater prosperity for some — and profound disruption for others, primarily knowledge workers, consultants McKinsey & Co said in a report.
Whole swaths of business activity, from sales and marketing to customer operations, are to become more embedded in software — with potential economic benefits of as much as US$4.4 trillion, about 4.4 percent of the world economy’s output, the study by McKinsey’s research arm said.
Generative AI would give humans a new “superpower,” and the economy a much-needed productivity injection, Lareina Yee, a senior partner at the firm and chairperson of McKinsey Technology, said in the report.
The research examined 63 use cases for generative AI, the type of tools that can generate content such as text or images based on a prompt, across about 850 occupations. Depending on how the technology is adopted and implemented, productivity increases could range from 0.1 percent to 0.6 percent over the next 20 years, the report said.
“Business leaders need to understand which activities can be changed, and how they want to rethink that,” Yee said. “That is a leadership choice, and it’s also execution.”
The transformation would pile pressure on the labor force, especially for higher-wage knowledge workers whose activities “were previously considered to be relatively immune from automation,” the report said.
A few years ago, McKinsey estimated that about half of worker hours worldwide were spent on tasks that could be automated. Now it has raised the figure to 60 to 70 percent. Employees could find that their time is reallocated — or that their jobs disappear.
“Workers will need support in learning new skills,” the report said. “Some will change occupations.”
About 75 percent of the potential value from applied generative AI would come in four business functions: customer operations, marketing and sales, software engineering, and research and development.
Banks alone could generate an additional US$200 billion to US$340 billion from increased productivity as the new technology improves customer satisfaction, helps decisionmaking and mitigates fraud through better monitoring, the report found.
That would equate to a jump in operating profits of somewhere between 9 percent and 15 percent.
In product research and development, the technology could deliver a boost to productivity of 10 to 15 percent, McKinsey said.
It cited the example of life sciences and chemical industries, where AI can generate potential molecules more quickly, accelerating the process of developing new drugs and materials.
That could add as much as 25 percent to profits for pharmaceutical companies and medical product firms.
The firm’s earlier research suggested that 2027 would be the first year when AI technology would be able to match the typical human’s performance in tasks that involve “natural-language understanding.” Now, McKinsey expects it to happen this year.
AI technology “will challenge the attainment of multiyear degree credentials,” McKinsey said, and its projections on workforce composition are consistent with a National Bureau of Economic Research working paper published this month by academics at Columbia Business School, the University of Maryland, University of California at Berkeley and AI for Good.
That study also predicted a significant reorganization of labor.
“AI investments are associated with a flattening of the firms’ hierarchical structure, with significant increases in the share of workers at the junior level and decreases in shares of workers in middle-management and senior roles,” it said.
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