Will millennials survive the robotic age?
Generative AI in the workplace: How will Millennials fare? ?
One of the loudest arguments against advances in the field of artificial intelligence, or AI, is the potential loss of millions of jobs that would be replaced by robots or automation. We wondered how millennials might be affected by this fast-evolving technology, as they approach the peak earnings age. If we are right, millennials are better equipped than older cohorts to work symbiotically with Generative AI and could see significant increases in productivity or new opportunities as a result. Rising incomes, and usually credit and consumption growth, go hand-in-hand with such increases in productivity. The combination should usher in a regime in which the economic footprint of millennials grows decisively.??
But first, what the heck is generative AI??
What is Generative AI?
Generative AI is a branch of artificial intelligence that relies on machine learning and deep learning algorithms to create new text, video, images, or programming logic for different types of applications. We’re still in the very early stages of what AI is capable of, but current examples include ChatGPT, Bing Chat and Google Bard, AI applications that produce text or images based on user-given prompts or dialogue. Digital voice assistants like Amazon’s Alexa, Apple’s Siri, and Google Assistant are common examples. They use AI to understand and respond in a human-like manner to answer queries, manage schedules, and even control smart home devices. These applications have the potential to displace workers engaged in lower-level repetitive, non-cognitive tasks that will impact some sectors of the economy more than others. They can be used to automate tasks, personalize services, facilitate eCommerce, and even detect fraud.?
Millennials’ lifelong connection to technology?
The millennial generation, now aged between 27 and 42, is sandwiched between Gen Zers who have been joining the labour force for the last decade, and Baby Boomers and Gen Xers who are next in line to retire. They were the first “digital natives” to grow up surrounded by electronic devices powered by cell phones and the Internet. Nielsen research found that millennials rank technology use as one of the most defining characteristics of their generation. Given their fluency and comfort with technology, millennials may have a more positive view of how technology affects their work.?
How will millennials cope with generative AI??
Millennials may just occupy a relatively stable middle ground. They are generally more educated than the older Baby Boomers and Gen Xers1, and therefore more likely to be able to complement new and especially cognitive technologies than less educated cohorts. Gen Zers are on track to exceed the education accomplishments of Millennials, but as the most junior and least experienced cohort in the labor force, they may lag their older peers in advancing. ?
New technology also creates new jobs?
New technology often displaces workers; but history shows that technological advances also create new jobs and even new economic sectors. History shows that workers are reinstated in new positions and even new sectors that rise, often because of the technology that created worker displacement in the first place. A 2022 study by economist David Autor (2022) finds that 60% of today’s job titles did not exist in 19402. Goldman Sachs Research reports that positions resulting from technological advances accounted for over 85% of the employment growth in the past 80 years3.?
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Millennial households better equipped to adapt?
A study sponsored by Pew Research Center in 2020 finds that millennials, more than older cohorts, are more likely to marry those with a similar education profile. Millennial households in which both partners have higher education have substantially higher household income than households with lower education4. Furthermore, it is unlikely that both partners would be displaced at the same time, and the higher income of those with higher education provides not only breathing space for a displaced partner to find a new job, but even to acquire more human capital through education5.??
Low-wage earners at greater risk of job displacement?
“The Economic Potential of Generative AI”, report by McKinsey Global Institute released in 2023 highlights the potential impact of AI on the U.S. job market. It predicts that jobs requiring automation, such as data collection and repetitive tasks, will likely be replaced by Generative AI. Low-wage workers are expected to be more severely affected. Goldman Sachs research ranks office administration and legal services as fields that will experience the greatest disruption and worker displacement as adoption of generative AI increases6. Workers who lack adequate skills will be more likely to face displacement than their more educated peers.?
Given their fluency and comfort with technology, millennials have a positive view of how technology affects their lives than any other generation. According to Nielsen research, more than 74 percent of millennials feel that new technology makes their lives easier, and 54 percent feel new technology helps them be closer to their friends and family7. ??
How will the AI revolution play out??
Given a choice, most workers would prefer not to be displaced. For those who remain in their jobs after new technologies are adopted, research shows that productivity typically rises, sometimes quite substantially. Research by Alderucci et al (2022) estimates in-firm productivity can grow by a massive 6% annually after the adoption of new technologies, while Acemoglu and Restropo (2023) find a more modest 2% impact5. Increased adoption of new technologies leads many to believe that job creation will follow. A net share of over 20% of companies expect AI to add jobs rather than replace them, according to the World Economic Forum's July 2023 data.?
If we’re right about millennials having an edge in the middle of the pack owing to their education and experience, they are not only more likely to retain their jobs, but also to be recruited for new jobs. We all face uncertain challenges ahead, but millennials may be in a position to adapt to the changes as Generative AI flows into our lives and businesses.??
Our solutions?
The MSCI Millennials Index aims to represent the performance of a set of companies that are associated with the development of new products and services that target the preferences of the millennial generation.?
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