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How AI will change the labour market

Digitisation, automation and AI are having a profound impact on labour markets, with low-skilled jobs or those involving
repetitive tasks at greater risk of being replaced by AI.

Nicki Bourlioufas This article is part of a Growth Nation series exploring the impact of technology on the
economy and our lives.
Jun 7, 2023 – 5.00am

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The launch of ChatGPT has reignited the discussion around how many jobs

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could be replaced by artificial intelligence (AI).

While AI can help boost productivity by eliminating some routine tasks, it is

likely to eradicate some jobs, including white-collar roles – but new jobs will
also emerge.

Digitisation, automation and generative AI are having a profound impact on

labour markets across developed economies, with low-skilled jobs or those
involving repetitive tasks at greater risk of being replaced by AI.

But even higher

higher
higherskilled
skilled
skilledroles
roles
rolesincluding
including
includinglegal
legal
legaland
and
andengineering
engineering
engineeringjobs
jobs
jobs could be
replaced by computers.

The federal government last week called for submissions in a snap eight-
week consultation about how to classify and regulate the new technology,
and is considering a ban on “high-risk” uses of AI such as in surgery.

higher skilled roles including legal and engineering jobs

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Randstad NSW director Jo Jakobs says many white-collar roles are

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vulnerable to being replaced by AI, particularly those involving routine tasks
such as document writing or drafting, or working with numbers or data, The US
which computers can learn to do at a much faster rate. is
waiting
for you
“What’s interesting about this next wave of potential job displacement is Sponsored
by Visit the USA
that it is affecting higher-skilled roles,” says Jakobs.
Sydney's
“This includes data analysts and market researchers; AI can analyse data new
party
much faster and accurately than humans, which makes it easier for hub
companies to make data-driven decisions. Sponsored
by Westpac

“Content writers, too, will be affected. AI already is replacing and powering

large parts of the content generation process. From ideas generation to
creating press releases and blog articles, the impact of AI in this space is just
starting to be fully felt and understood.”

Higher-order thinking
Jakobs says AI can also automate tasks such as data entry, reconciliations
and financial reporting. “AI-powered robo-advisers can also provide
investment advice and portfolio management services. So, too, can AI
automate legal tasks such as document review, legal research and contract
drafting,” she says.

However, AI can’t do everything. It can’t replace human cognition and

higher order thinking, which involves using language, memory and
perception.

Diana Mousina, a senior economist with AMP, says high-skilled jobs such as
management jobs will be harder to replace by AI because they involve
human judgment and expertise.

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AMP senior economist Diana Mousina: “Soft skills can’t be replaced by AI, and jobs involving human judgment.”

“High-skill jobs tend to be harder to replace by machines because they are

non-routine and cognitive-based, such as management and professional
jobs,” she says. “This includes soft skills, which can’t be replaced by AI, and
jobs involving human judgment.

“But middle-skill jobs are more susceptible to displacement by technology

because they tend to be routine-based manual or cognitive tasks such as
production jobs and jobs including sales and office occupations, which
means they can be learned and replicated by machines.”

Moreover, Australia faces

faces
facesaaalower
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lowerrisk
risk
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of
oflosing
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jobs
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to
toautomation
automation
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than
than
many
many
manyother
other
otherOECD
OECD
OECDcountries
countries
countries given the nation’s greater levels of education,
robust export services sector and high rates of urbanisation.

“Fear of machines taking all human jobs is also misplaced. Around 14 per
cent of jobs in the OECD are at a high risk of automation and most of these
are in middle-skill routine roles. In Australia, it is closer to 7 per cent,” says
Mousina.

“Globally, the workforces that are more at risk of having jobs automated
include those in countries with a low-educated workforce, a weak tradeable
faces with
services sector and those a lower riskurbanisation
a low of losing jobs to automation than
rate.”
many other OECD countries

According to the OECD’s latest estimates, in Australia 10 per cent of jobs

have been estimated to be at aaahigh
high
highrisk
risk
riskof
of
ofautomation
automation
automation compared to an
OECD average of 14 per cent. Jobs at risk of significant change are estimated
at 24.6 per cent, compared to 31.6 per cent for the OECD average.

Difficult to replace
Regions where jobs are at most risk of automation tend to be those with
high employment shares in manufacturing, agriculture, or the mining
sector, says the OECD report, Preparing
Preparing
Preparingfor
for
forthe
the
theFuture
Future
Futureof
of
ofWork
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WorkAcross
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Across
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Australia

a high risk of automation

Mousina also notes that some manual low-skill jobs, including service-based
jobs related to assisting others like cleaning and gardening, will be difficult
to replace by a machine or AI.

“Such jobs are likely to grow in importance from a growing middle-class and
ageing populations. It’s the routine office jobs that are most at risk of AI.”

In the US, a new report by Goldman Sachs estimates that 46 per cent of
Preparing for the Future of Work Across
administrative positions, 44 per cent of legal positions, and 37 per cent of
Australia
engineering jobs could be replaced by AI. More generally, that report found
that 18 per cent of jobs globally could be automated by AI.

White-collar workers would be the first to go in the US, with the greatest job
losses likely in office support and administrative roles, in the legal industry
and in architecture and engineering.

Remove drudgery
However, experts agree that as AI technologies are developed, this will
create new job opportunities, especially for professionals who can develop,
maintain and operate AI systems, such as computer programmers and
software engineers.

“AI technologies have the potential to create new job opportunities,

particularly in areas such as, of course, AI development, maintenance and
customer support, and in areas we might not even realise or know of right
now,” says Randstad’s Jakobs.

“There are roles in play currently known as prompt engineers whose main
responsibility is to feed and train the AI to continuously give users more
accurate and useful responses.

“Additionally, the automation of routine and repetitive tasks can actually

remove some of the drudgery involved in some roles and free
free
freeup
up
upworkers
workers
workersto
to
to
focus
focus
focustheir
their
theirtime
time
timemore
more
moreonon
onthe
the
thecreative
creative
creativeand
and
andhigher-value
higher-value
higher-valuework
work,
work such as
relationship building.

“However, my view is that while AI can replace some tasks within these
roles, it’s unlikely to replace entire jobs. The human factor is still relevant
and hugely important.

“AI has not evolved to the point where it is a replacement for human skills
such as empathy, creativity and critical thinking – which are still highly
valued in many industries and professions, and are likely to remain
important for years to come.” free up workers to
focus their time more on the creative and higher-value work

Nor is it too late for workers to train to gain AI skills or for graduates to focus
on in-demand IT skills.

Hima Arafath, a recruiter for data analytics and data engineering

professionals at Parity Consulting, says AI skills are some of the most in-
demand in Australia. Jobs in high demand include data scientists, software
engineers, software developers and architects, machine learning engineers,
business intelligence developers, research scientists and data analysts.

“The future of AI-driven automation is something that the Australian

workforce should be preparing for,” she says. “Individuals should consider
retraining or upskilling themselves in areas where they feel machines could
replace them. This will help workers keep ahead of the curve and ensure
they are skilled in using new automation technologies as they come online.

“These technologies are constantly evolving, and it takes time and effort to
keep up with the latest advancements. As a result, people with these skills
are rare, and companies are willing to pay top dollar to such employees.
However, automation can’t bring personalisation and that ‘human touch’,
which is a crucial element for any business.”

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