Artificial intelligence expected to lead to job reductions within a fourth of businesses
Get ready for some serious changes in the German job market. Around a quarter of companies (27.1%) believe that artificial intelligence (AI) is gonna make a significant dent in the number of jobs in the next five years. This ain't just about robots taking over, it's about AI automating certain tasks that humans used to do.
According to Klaus Wohlrabe, head of surveys at ifo, companies, especially in the industry, are expecting a major shift in their operations, thanks to AI. Only 5.2% of companies are expecting to hire more folks, while two-thirds reckon the number of jobs will remain unchanged.
So, where will the axe fall? In industry, more than a third of companies (37.3%) are fearing job cuts, and the retail sector isn't far behind with nearly 30% expecting the same. But it's not all doom and gloom. Over 80% of companies in the construction sector believe AI ain't gonna affect the number of workers they've got.
On the flip side, positive employment impacts are starting to show in the tech-related services sector like IT and information processing. Some companies are already expecting an increase, with some expecting more than 10% growth!
AI ain't just a tool for cost-cutting, it's also the key to creating new job profiles, according to Wohlrabe. Now, the employment effects of AI are still pretty minor, but in the long run, AI could drastically alter the German labor market.
The challenge lies in making sure the productivity gains from AI are shared across the board, without causing too much disruption in specific occupational groups. Wohlrabe highlights the need to translate these gains into broad prosperity.
Enrichment Insights
Potential Job Cuts Due to AI
- Companies in Germany expect AI to result in job losses, with the automotive sector being particularly vulnerable.
New Job Profiles and Upskilling
- Although AI may lead to job cuts, it also creates new roles in AI development, deployment, and management.
- Workforce development in Germany is adapting to new AI technologies, emphasizing the need for training and reskilling.
Investment in AI
- Companies in Germany are investing more in AI to drive innovation and efficiency.
- The majority of companies (91%) consider AI as business-critical, indicating its importance for future business models.
Future Outlook
In the coming years, the German labor market will likely see a combination of challenges and opportunities as AI continues to shape various industries. Some sectors might face job losses due to automation, while others could see growth in AI-related roles. The key to navigating these changes will be continuous reskilling and strategic investments in AI technologies.
- Economic and social policy must address the potential job losses in industries like automotive due to AI, while also focusing on creating new roles in AI development, deployment, and management.
- Finance and business leaders in Germany should consider AI as a business-critical investment for driving innovation and efficiency, as 91% of companies already do.
- As technology advancements continue, the art of upskilling and reskilling the workforce will be crucial for adapting to new AI technologies and maintaining overall prosperity in the German labor market.
