By Aman Kayal (Editor-in-Chief)
Chat Generative Pre-Trained Transformer, is a chatbot developed by OpenAI. It drew attention of people for its comprehensive responses and precise answers to user prompts.
Generative AI and Chatbots have been of interest for years to companies looking for ways to help customers get what they need and to AI researchers trying to tackle the Turing Test. In November 2022, the power player OpenAI began public testing of their revolutionary ChatGPT or Chat Generative Pre-trained Transformer. This tool lets you type natural language prompts and then offers conversational responses on the basis of your thread of conversations and massive volumes of information available on the internet.
However ChatGPT doesn’t exactly know anything. It’s an AI bot that’s trained to recognise patterns in vast swaths of text harvested from the internet, then further trained with human assistance to deliver more useful, better dialog. The answers you may get might sound plausible and even authoritative but they might well be entirely wrong, as OpenAI warns.
Chatbots have proved to increase automation, reduce support costs and increase revenue in all financial sectors.With the onset of ChatGPT and bulky investors like Microsoft interested in this tech-job displacement is a rising concern that will directly affect the workforce and in turn the global economy.
McKinsey recently conducted a study wherein they found seventy percent of firms may have deployed at least one category of AI technology, and less than fifty percent may have fully integrated all five categories. By 2030, the potential impact of artificial intelligence on global economic activity may amount to around 13 trillion dollars. This potential impact would be the outcome of increased productivity and other channels associated with the deployment of Artificial Intelligence.
The most important aspect of AI in the global economy is its relation with the labour market. The impact of artificial intelligence on employment and jobs is diverse and complex, with both positive and negative aspects. Many new occupations boosted by AI, such as digital assistant engineers, warehouse robot engineers and AI marketing specialists are likely to arise soon.
In the short run, AI can automate specific processes decreasing worker demand in particular fields. In addition to it, it could generate new employment opportunities in areas like AI development while boosting overall productivity of the workforce and raising wages. The impact will also depend on the rate of technological adoption. We thereby obtain an inelastic labor supply in the short run as any form of reskilling of workers takes time. In the longer run, positively influencing productivity could lead to an increase in labor demand or even reduction in the demand for human workers. For instance, chatbots may completely automate call centers that human agents previously ran.
The jobs such as coders, software developers, computer programmers, and data scientists are at risk of being displaced by AI. In addition to that, media jobs, including those in advertising, technical writing, journalism, and content creation, may also be affected by ChatGPT and similar forms of AI. Also, legal industry jobs such as paralegals and legal assistants are susceptible to AI- driven change, as they consume large amounts of information, synthesize what they learned, and make it digestible through a legal brief or opinion. Furthermore, ChatGPT may also significantly impact customer service representatives, teachers, those working in certain finance-related industries, and market research analysts. It can be argued that financial jobs that involve data analysis, such as market research analysts and personal financial advisors, may be impacted by AI. AI can analyze market trends, identify investment performance, and make investment forecasts based on data.
Short Run Impact of ChatGPT on Labour Demand and Labour Supply
The impact of AI on the labor market is directly tied to the mismatch in skills between the jobs being replaced and the employees who are losing their employment. This mismatch can lead to long-term unemployment for employees who cannot learn new skills to shift to other occupations. Opportunities for reskilling and upskilling can offset the harmful effects of AI on the job market.
The influence of AI on the labor market depends upon several economic and social factors, including the rate and scope of automation adoption, the types of employment and industries impacted, and the availability of reskilling and upskilling possibilities for employees. Some variables, such as the degree of economic growth, the structure of the local economy, and the availability of reskilling and upskilling possibilities, influence the impact of AI on the labor market. To conclude we can say that, this pull and push of automation and displacement is one that will dictate the future of global economies under the purview of AI and tools like ChatGPT.
References and Further Readings:
Artificial Intelligence and Jobs: Evidence from Online Vacancies. (2022). Journal of Labour Economics.
Genz, Gregory, T., Jansur, M., Lehmer, F., & Britta Matthes. (2021). How Do Workers Adjust When Firms Adopt New Technologies. ZEW-Centre for European Economic Research Discussion Paper.
Tech rivals chase ChatGPT as AI race ramps up. (2023, March 2). The Economic Times. Retrieved April 1, 2023, from https://m.economictimes.com/tech/technology/tech-rivals-chase-chatgpt-as-ai-race-ramps-up/amp_articleshow/98364481.cms
Zarifhonarvar, A. (2023, February). Economic of ChatGPT: A Labour Market View on the Occupational Impact of Artificial Intelligence. SSRN Papers. Retrieved April 1, 2023, from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4350925
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