We’re only a year in the introduction of Generative AI with the launch of ChatGPT or image AI tools like Midjourney. We already see the effects of this, as the industries impacted the most take advatange of the cost cutting possibilities of these new technologies. The risk for the labor market is that once these technologies and solution move up the maturity curve, more and more skills will be replaced. Skills that in the past were considered not only assets, but also complex and irreplaceable.

The impact of labor shortages has even fueled trade wars among countries, exemplified by the United States banning H1B visas under President Trump. While the policy analysis is more complex, if countries don’t need to rely anymore on importing skilled professionals by using advanced generative AI – then labor mobility will see a huge shift?

Since the exploration and subsequent colonial age, labor has traversed geographies, sometimes freely. Many countries can trace their modern history to this era, marking the trajectory toward becoming some of the world’s wealthiest nations by welcoming skilled immigrants from around the globe. Throughout human history, borders have been permeable. It was only in the past century, during the modern era, that borders became fortified. Barriers to entry and, at times, exit from countries reached their height during the Cold War.

Following the fall of the Berlin Wall, there was a new surge in global movement, fueled by the demand for unique skill sets and the growth facilitated by the era of globalization. Thousands of workers relocated across countries and continents, contributing to a rise in global GDP by trillions and elevating numerous countries from developing to developed status in just under three decades.

SaaS – Skills as a Service

What if the demand for specific skill sets could be fulfilled effortlessly, akin to a click – “Skills as a Service” (SaaS)? Sam Altman recently mentioned that in his tech CEOs chat group, there’s a wager on how quickly a one-person company could attain a billion-dollar valuation. The potential future scenario raises the question: what if the key skills needed to propel a company to unicorn status could be accessed through a cloud interface, where one could easily select the required number of accountants, marketers, engineers, or customer service chatbots?

This future might be here already. The better question is how fast traditional built companies with hundreds of thousands of employees will look at the new company structures and realize, under pressure from their shareholders, that their size is a competitive disadvantage?

These companies will look to hire only analytical, cerebral big picture type of employees that perhaps played strategy video games in their teens that can look at the “Workforce Dashboard” and adjust the skills that the company needs on a daily basis depending on what you need.

If generative AI can build a marketing plan and execute on it in one day, instead of months, why bother creating project plans and scheduling tasks in a way that make sense?

This person will put the Marketing slider to zero will the Engineering slider is set to maximum while the AI works to build a new product or improve an existing one. Once that is done, through numerous iterations, then Engineering goes to zero and Marketing to maximum. In essence, the AI SaaS (skills as a service) will be used in a similar way to contracting workforce is used today, but much more ruthlessly (or perhaps flexible is the word that will be used).

Depiction of a future SaaS provider

This is a very layered discussion, one that stacks like this, from top to bottom: countries will adjust their policies regarding labor movement once they see the demand decrease from the industries they oversee. Companies will adjust their employee retention policies and decrease hiring to ensure they are competitive against new market entrants and to keep their stocks afloat. Employees will gravitate to new areas that are brand new, or old ones that are enhanced by AI while focusing on a constant battle of personal development to ensure their skillset is relevant. Finally, education will try to stay relevant by offering a mix of subject in a STEM degree and possibly reverting back to building analytical skills rather than topics.

This discussion unfolds in layers, each influencing the next:

  • At the national level, countries are poised to recalibrate their labor movement policies in response to diminishing demand from the industries they oversee. Simultaneously, companies are adapting by revising employee retention strategies and curbing hiring to stay competitive amid the influx of new market players and to buoy their stock performance.
  • On the individual level, employees are navigating toward emerging sectors or revitalizing traditional ones by leveraging AI advancements. This shift is accompanied by an ongoing personal development struggle to maintain a relevant skill set.
  • Lastly, in the education industry, institutions will strive to remain pertinent by offering blended STEM degrees that are comprised of various non-STEM subjects. There’s also a potential reversion to emphasizing analytical skills over specific topics, acknowledging the demand for adaptability in an era marked by technological disruption.

UBS Talks About STEM Irrelevancy

UBS’s Chief Economist Paul Donovan highlights the concept of “stranded assets” in the wake of the fourth industrial revolution. Beyond traditional economic structures, the blog suggests that STEM skills, once deemed paramount, may face vulnerability, and even become obsolete assets in the evolving landscape.

Paul Donovan talks about education, particularly STEM subjects (science, technology, engineering, and mathematics), could also become stranded assets in the evolving landscape.

The analysis challenges the conventional perception of STEM skills as enduring assets. Historically, STEM skills have faced quicker obsolescence than their counterparts in more abstract subjects. The ease with which technology can replace absolute STEM skills, particularly in areas like computer coding, suggests a potential paradigm shift in the value of these skills.

Industries are being pressured from their stakeholders to ensure competitiveness, and in the past year we have seen a number of deep changes across multiple areas that will only accelerate:

The change will reverberate horizontally in all industries – new skillsets will be needed, demand for services and solutions will create new unicorns and products that will outperform any traditional IT solution. Even the internet will either change entirely or it will become a parody of its intended purpose as by 2026 almost 90% of the internet will be AI generated.

Less talked about is how the AI changes will move vertically, changing entire labor policy and immigration views to impact on how and what type of education future generations will need to access.

Share.

I am equally passionate about technology, nature, ecosystems, and exceptional cuisine.

Leave A Reply

Exit mobile version