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Despite the prediction that AI will help enhance productivity, the key questions are which jobs are at risk of being displaced and which ones will be enhanced by AI.1 This has important implications for the real estate sector. On the one hand, productivity enhancing AI can boost overall job numbers if innovation spurs a sector and causes demand to grow in excess of the productivity gains delivered by AI. On the other hand, if output is static, productivity advances can see the same amount of output produced with fewer hours from people required.
According to the IMF, about 40% of jobs globally are exposed to AI. The advanced economies are at greatest risk, with 60% of their jobs exposed due to a prevalence of cognitive, task-oriented roles. In addition, the OECD predicts that across its member states, 28% of jobs are in occupations at high risk of automation.2 AI also has the potential to work with robotics and can improve manufacturing processes.
Companies may utilize algorithms to complete tasks, resulting in a lack of human touch behind the work. This could also have a knock-on effect in the future if the workload of junior staff becomes more automated and they lack the training and development needed to progress into senior roles, creating a widening skills gap.
However, we currently see many AI service providers making the more conscious decision to explore a human-centric approach assisted by AI ‘co-pilot’ products, rather than ‘auto-pilot’ products which aim to entirely replace human roles. For example, Microsoft reported that more than 27,000 organizations are incorporating its Microsoft GitHub Copilot AI platform into their businesses to increase the productivity of software developers.3
Technological advances can have a non-disruptive impact on the economy and generate employment rather than displace jobs. For example, a recent MIT study found that 60% of today’s jobs did not exist in 1940 and were brought about by technological advances. For example, jobs in the aviation industry.4
Hence AI is likely to augment jobs rather than replace human workers, and can often enhance their jobs. Simple process-driven elements of roles have the greatest scope to be automated, leaving workers to focus on higher value-add activities and boosting overall productivity.
To summarize, there are three main impacts that AI could have on jobs: disrupt, augment or create. The disruption includes roles that could be fully or partially automated. Augment allows tasks to add new capabilities and efficiencies to existing roles. And AI can create jobs such as developing, implementing and servicing AI.
AI as a technology is still in its early phases and will likely impact the economy in ways not yet envisaged. The wide range of outcomes means there is significant uncertainty about the future of AI and its impact on the labor market. The downside is greater structural unemployment due to job displacement, while the upside is net job creation and productivity enhancements. The overall impact will vary by sector, however, the office sector will likely be impacted most. We will discuss this in more detail later.