Don’t Panic? But it might be just what we need right now!

“There is no such thing as paranoia. Your worst fears can come true at any moment”.

Hunter S. Thompson

Arthur C. Clarke once said that Douglas Adams' "don't panic" (the cover page of The Hitchhikers Guide to the Galaxy) was perhaps the best advice that could be given to humanity.

In a recent opinion piece in The Guardian, novelist and playwright Daniel Kehlmann suggested that in artificial intelligence we are facing something for which we have no adequate instinct, and the proof for this is that we are not panicking (yet) – because panic would be the rational response to the tsunami on the horizon.

Kehlmann utilizes Daniel Kahneman’s System 1 and System 2 thinking to argue that AI is unlikely to substitute for us in terms of complex problem-solving and analytical tasks where more thought and consideration are necessary BUT in the realm of System 1 – which relates to fast, automatic, and intuitive thinking and decision-making based on patterns and experiences, “where we spend most of our days and where many not-so-first-class cultural products are created” we are very likely to be outgunned.

“Prosperity is not without many fears and distastes; adversity not without many comforts and hopes”. Francis Bacon

Nick Frost, co-founder of Cohere, which builds custom AI models for organizations says “I don’t think that we are going to have digital gods, anywhere, anytime soon. I think more and more people are kind of coming to that realization, saying this technology is incredible. It’s super powerful, super useful. It’s not a digital god”.

The ‘digital god’ or Artificial General Intelligence – would be able to accomplish any intellectual task that human beings can perform and/or surpass human capabilities in the majority of economically valuable tasks.

But as we have said many times before, the pursuit of AGI might be something of a distraction. AI may develop many of the cognitive abilities associated with the human mind but still not achieve digital god status. Without achieving AGI, new models may well have the capabilities that allow them to do even more knowledge work, and displace even more knowledge workers, than they currently do. While it walks like a duck and quacks like a duck, it might not be a duck, but it is so ‘duck-like’ that in reality it makes no difference. AI doesn’t need to have the intelligence of the smartest humans to completely reshape whole sectors of the economy. You don’t need to be a savant to perform well in whatever job you have, most of us are ‘smart enough’. We don’t need to achieve AGI for artificial intelligence that is ‘just smart enough’ to displace millions of jobs.

So much money going into AI has generated so much hype and expectation. But we are now moving from a period of AI excitement to the less glamorous, but ultimately more impactful, period of practical AI application. There isn’t going to be a ‘big bang’ … in reality the impact of AI on jobs is going to be seen in a steady drip drip of corporate press releases that talk about efficiency and rationalization. Like the ‘boiling frog’ apologue, we won’t realize that we have been boiled alive until it is too late.

In January an IMF report noted that “we are on the brink of a technological revolution that could jumpstart productivity, boost global growth and raise incomes around the world. Yet it could also replace jobs and deepen inequality. In advanced economies, about 60 percent of jobs may be impacted by AI. Roughly half the exposed jobs may benefit from AI integration, enhancing productivity. For the other half, AI applications may execute key tasks currently performed by humans, which could lower labour demand, leading to lower wages and reduced hiring.

In an interview this week on the BBC, Sebastian Siemiatkowski co-founder and CEO of Swedish fintech company Klarna confirmed that the business will reduce headcount by almost 50% in the coming years through efficiencies that arise out of an investment in artificial intelligence.

The business has already introduced an AI assistant that is handling the workload equivalent to 700 full-time staff members.

The business, he said, experiences circa 20% workforce turnover annually and would use this "natural attrition" to reduce headcount - effectively a hiring freeze, where staff aren't replaced after they leave.

"Our proven scale efficiencies have been enhanced by our investment in AI, which has driven down operating expenses and improved gross profits"

Mr Siemiatkowski contends that, rather than the remaining staff having to do more, AI would be replacing work. A substitute for human endeavour.

And Klarna is not alone … whether it’s a small (ish) education technology company (Chegg) cutting back its workforce “to better position the Company to execute against its AI strategy”, Dropbox cutting about 16% of its workforce citing AI or IBM pausing its hiring for 7,800 roles it thinks could be replaced with AI in the coming years … what we hear is the steady drip drip of jobs being lost.

A March 2024 poll of 2000 executives conducted by Swiss staffing firm Adecco Group in collaboration with research firm Oxford Economics, showed that 41% of respondents expect to employ fewer people because of the technology.

In June 2024 a study by the Federal Reserve Bank of Richmond found that 45% of firms said that they adapted automation over the past few years as part of a path towards reducing their employees, [and] a very similar 46% of firms said they planned to do the same ‘over the next two years.

Also in June Citigroup reported its findings that 54% of jobs across banking have a high potential to be automated and that an additional 12% of roles across the industry could be augmented with AI technology. 

There is a persistent rhythm of organizations big and small announcing reductions in staff numbers as they come to terms with the practical opportunities that AI offers. It is a sign that we are becoming more grounded and realistic in terms of what AI can and will do for us (versus what it cannot – at least in the short to medium term)?

And maybe the people at the sharp end … the people who are likely to be in the AI firing line are beginning to look up and take notice (maybe not yet panicking!).

IPSOS’ ‘Global Views on AI’ (July 2023) found that the proportion of those who think that AI will dramatically affect their lives in the next three to five years has increased from 60% to 66%, but the question is … dramatically good or dramatically bad? 52% claim to be nervous about AI products and services which is a 13% increase on the year before.

Three months after the IPSOS study, the Office for National Statistics released its report into ‘Public awareness, opinions and expectations about artificial intelligence: July to October 2023’. This showed that …

Twice as many adults thought AI brings greater risks than benefits (28%) than those who thought it has more benefits than risks (14%).

Around one-third (32%) of adults agreed or strongly agreed that AI will benefit them – improving their access to healthcare (31%) and their shopping experiences (27%), and 25% expected it to increase their access to learning or education.

Over one in three (36%) adults said they did not think AI could have a positive impact on their lives.

Over a quarter (28%) of adults in employment surveyed thought AI could make their job easier, while 32% reported AI could put their job at risk.

The UK government’s Centre for Data Ethics and Innovation published its latest Public Attitudes to Data and AI Tracker in February 2024. It found that as understanding and experience of AI grows, the public is becoming more pessimistic about its impact on society. A growing proportion of the public think that AI will have a net negative impact on society, with words such as ‘scary’, ‘worry’ and ‘unsure’ commonly used to express feelings associated with it. Most notably, there is widespread concern that AI will displace jobs, particularly among non-graduates, and that AI will erode human creativity and problem-solving skills.

Sebastian Siemiatkowski of Klarna believes that AI will have a dramatic impact on jobs and that governments need to turn their attention to the wider societal impacts.

“[It is] too simplistic to just say new jobs would be created in the future […] politicians already today should consider whether there are other alternatives of how they could support people that may be effective", but also there was no "stopping progress" for firms like his. The outsourcing of cognitive tasks to artificial intelligence means that jobs requiring problem-solving, decision-making and creativity are now squarely within the purview of AI.

Maybe now is just the right time to start rationally panicking. Maybe ‘panic’ is just the response we need to kick-start a proper conversation about the likely impact of AI on jobs and steer us away from many of the trite responses we have heard to date.