Future of Work: AI’s Paradigm Shift for Labor

Concluding a two-part roundtable discussion, our global heads of Research, Thematic Research and Firmwide AI focus on the human impacts of AI adoption in the workplace.

Read more insights from Morgan Stanley.

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Kathryn Huberty: Welcome to Thoughts in The Market, and to part two of our conversation on AI adoption. I'm Katy Huberty, Morgan Stanley's Global Head of Research. Once again, I'm joined by Stephen Byrd, Global Head of Thematic Research, and Jeff McMillan, Morgan Stanley's Head of Firm-wide AI. 

Today, let's focus on the human level. What this paradigm shift means for individual workers. 

It's Wednesday, November 5th at 10am in New York. 

Kathryn Huberty: Stephen, there's a lot of simultaneous fear and excitement around widespread AI adoption. There's obviously concern that AI could lead to massive job losses. But you seem optimistic about this paradigm shift. Why is that? 

Stephen Byrd: Yeah, as I mentioned in part one, this is the most popular discussion topic with my children. And I would say younger folks are quite concerned about this. There's a lot of angst among young folks thinking about what is that job market really going to look like for them. And admittedly, AI could be quite disruptive. So, we don't want to sugarcoat that. There's clearly going to be impacts across many jobs. Our work showed that around 90 percent of jobs will be impacted in some way. Oh, in the long term, I would guess nearly every job will be impacted in some way. 

The reason we are more optimistic is that what we see is a range of what we would think of as augmentation, where AI can essentially help you do something much better. It can help you expand your capabilities. And it will result in entirely new jobs. 

Now with any new technology, it's always hard to predict exactly what those new jobs are. But examples that I see in my world of energy would be smart grid analysis, predictive maintenance, managing systems in a much more efficient way. Systems that are so complicated that they're really beyond the capability of humans to manage very effectively. So, I'm quite excited there. I'm extremely excited in the life sciences where we could see entire new approaches to curing some of the worst diseases plaguing humankind. So, I am really very excited in terms of those new areas of job creation. 

In terms of job losses, one interesting analysis that a lot of investors are really focused on that we included in our Future of Work report was the ratio – within a job – of augmentation to automation. The lower the ratio, the higher the risk of job loss in the sense that that shows a sign that more of what AI is going to do, is going to replace that type of human work. Examples of that would be in professional services. As I mentioned, you know, one of my former professions, law would be an example of an area where you could see this. But essentially, tasks that don't require a lot of proprietary data, require less creativity. Those are the types of tasks that are more likely to be automated. 

Kathryn Huberty: One theme I hear both in Silicon Valley and in our industry is the value of domain expertise goes up. So, the lawyer that's very good in the courtroom or handling a really complicated situation because they have decades of experience, the value of that labor and talent goes up. And so, when my friends ask me what their kids should pursue in school and as a career, I tell them it's less about what job they pursue. Pick a passion and become a domain expert really quickly. 

Stephen Byrd: I think that's excellent advice. 

Kathryn Huberty: Jeff, how do you see AI changing the skills we'll need at Morgan Stanley and the way that people should think about their careers? 

Jeff McMillan: I think you have to break this down into three pieces – and Stephen sort of alluded to it. One, you have to look at the jobs that are likely to disappear. Two, you have to look at the jobs that are going to change. And then finally, you have to look at the new jobs that are going to actually emerge from this phenomena. You should be thinking right now about how you are going to prepare yourself with the right skills around learning how to prompt and learning how to move into those functions that are not going to be eliminated. 

In terms of jobs that are changing, they're going to require a far, far greater sense of collaboration, creativity. And again, prompting; prompt engineering is sort of the center of that. And I would highly encourage every single person w