Generative AI Is Better for Augmentation than Automation … For Now

According to research I’ve helped conduct in the past, HR professionals tend to think that AI will be more widely used for the automation rather than the enhancement of work. But, I think that’s the wrong way to view it. For the most part, these AIs can’t actually take over many jobs. Rather, they help people be more productive at those jobs. So, generative AI is better for augmentation than automation.

Jobs Could Be Lost

This does not mean, however, that jobs can’t be lost. If you can triple the productivity of a nine-person team, for example, then you could potentially lose six of those people and maintain the same production as before. So, yes, jobs could potentially be lost.

On the other hand, it very much depends on the job and how it’s managed. Let’s say that we’re talking about software developers. In a firm that sells software products, the sticking point in the past may have simply been the cost of labor.

But Let’s Be Specific

Let’s assume a team of nine developers creates and maintains a product that brings in $3 million dollars of revenue per year, and let’s assume that the cost of employing this team is $1.5 million per year. Let’s also assume some form of generative AI can triple productivity so that the team can be reduced to just three people. So, yes, the company could save $1 million dollars per year by terminating six of those positions.

Leverage the Wealth-Creation Machine

Or the company could earn many times that amount by keeping them and assigning them to other revenue-earning projects.

Let’s now assume those six developers can be reallocated to create and implement two other products, both of which also can bring in $3 million per year. At this stage, the revenue earned by these six employees will be $6 million dollars, or $1 million per employee.

This is, of course, how productivity works. It’s a system with positive feedback loops that, if harnessed correctly, becomes a wealth-creation machine.

Oh, I know my arithmetic is over-simplified. Salaries, revenues and profits are never that straightforward. But you get the idea. Depending on the job and the business model, generative AI could actually increase the demand for certain skills because it can massively boost productivity, which boosts revenues and profits.

This Could Change, Of Course

Of course, this could change if generative AI (or whatever AI comes next) can fully automate most white-collar work, but we’re not there yet and, from what I can see, we’re not that close. These AIs are still prone to hallucinations and mistakes, and they require trained professionals to be able to detect those mistakes as well as engage in more creative and strategic work.

So, my advice for now is to leverage these technologies for augmentation rather than automation. Get while the getting’s good. Ultimately, that’s how economies and labor markets thrive.