Silicon Valley, the place that did more than any other to pioneer artificial intelligence, is the most exposed to its ability to automate work. That's according to an analysis by researchers at the Brookings Institution, a think tank, which matched the tasks that OpenAI's ChatGPT-4 could do with the jobs that are most common in different US cities. The result is a sharp departure from previous rounds of automation. Whereas technologies like robotics came for middle-class jobs — and manufacturing cities such as Detroit — generative AI is best at the white-collar work that's highly paid and most common in "superstar" cities like San Francisco and Washington, DC. The Brookings analysis is of the US, but the same logic would apply anywhere: The more a city's economy is oriented around white-collar knowledge work, the more exposed it is to AI. "Exposure" doesn't necessarily mean automation, stressed Mark Muro, a senior fellow at Brookings and one of the study's authors. It could also mean productivity gains. A separate study, released in February by the AI firm Anthropic, found that Anthropic's chatbot Claude directly completed a task in 43% of its conversations, whereas it was asked to collaborate with a human in 57% of them. "The big question is whether AI is a substitute [for human work] or a complement," said Nicholas Bloom, an economist at Stanford not involved in either study. "If it's a substitute, then the Bay Area and Northeast Corridor will see massive job churn, and potentially job loss." In that scenario, AI would be "like a China Shock for the 21st century," he said. On the other hand, "If it's a complement, then these areas could boom," Bloom said, citing the example of AI making coders more productive and consequently increasing their employment. Muro said he and his colleagues struggled when it came to the question of what to do about AI's encroachment. In the era of industrial automation, the typical advice was to "remain human, be creative, prize learning," he said. But in the face of AI's flexibility, emotional intelligence and creativity, "those sound a little bit trite right now." AI will also test our theories of what superstar cities really do economically. Are they just collections of individuals with skills that happen to be highly compensated? Or are these cities special engines of innovation and flexibility? If it's the former, the labor markets in San Francisco and San Jose could be in trouble. If it's the latter, they could be the cities that not only invent modern AI but figure out how to use it. — Walter Frick, Bloomberg Weekend Edition |
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