Article available in Spanish here.
A century ago, one fifth of the country was involved in agriculture. Due to the transformation of farming technology, only 1% of the country is now involved in farming, while our supermarkets are flooded with cheap food. I could be wrong, but I don’t see the 19% of the country who used to farm wandering around unemployed. They have retrained to do other things.
Innovation disrupts, but it also creates new jobs and improves the standard of living of society. A century ago, you could not have imagined most of the jobs we have today. I’m not just talking about social media celebrities; think about software engineers, data scientists, cybersecurity experts, etc. In fact, most white-collar jobs you see today did not exist 100 years ago. Yes, if you specialized in driving horse-powered carriages, you had to acquire new skills.
AI will displace many jobs, but it will also empower people with new productivity tools. Microsoft Excel replaced jobs that required people to add up rows of numbers with calculators, but it created many more. In the 1960s, corporations had departments filled with typists. A photocopier and then the personal computer put these hardworking folks out of a job, but they retrained to do other things.
If we have a victim mentality, AI will run us over; if we embrace it and adapt it to our lives, it may become our best friend to do the jobs we are doing, while our soon-to-be-unemployed coworkers complain about AI.
AI may have a similar impact on our lives as electricity did. Unless it becomes sentient and just like the Terminator, it turns against us (smarter people than me cannot agree on this, especially on a reasonable time frame, so I withhold my opinion on it), it will likely improve our lives significantly. One industry that immediately comes to mind is healthcare – we need major disruption in that sector.
AI may disrupt and completely reshuffle the power dynamics in some industries. Travel, for example, comes to mind; we may start looking for trips and booking tickets with the help of our AI assistant without going to the travel websites. Some companies will adapt and become winners, while others won’t and will become market-share donors.
As I am typing this, I realize (again, something I do daily now) how important management is. In our analysis, we should pay close attention to how companies are embracing AI. Are they giving it lip service or are they really adopting it and changing the business to take advantage of it?
When it comes to AI generating creative output, at first glance it looks impressive; but, as Nassim Taleb put it:
ChatGPT is a statistical representation of things found on the web, which will increasingly include ITS OWN output (directly and secondhand). You post something picked up from it and it will use it to reinforce its own knowledge. Progressively a self-licking lollipop.
If you want to see ChatGPT creating art, for the fun of it, spend some time on myfavoriteclassical.com, where I post music articles. Every single picture there is created by AI. I love impressionist artists, and thus I love these little AI creations. However, if you zoom in closer, you’ll find violinists playing with toothpicks, pianists with three hands and cellists with multiple arms and legs.
This self-licking lollipop is impressive, but it still has a lot to learn. (By the way, if you have not signed up to receive my classical music-only articles, you have an opportunity to do it here). Also, Nassim is right (as usual): The more we rely on AI and the more content it creates, the less creative it and we become.
On a related topic, I have strong thoughts about AI and writing, which I shared with my kids.
AI can be either your friend or your worst enemy. I use it to answer emails that require no thinking, which is a great time and energy saver. AI is also my friend in helping me to find better words to express my thoughts as I write.
However, the most important part about writing is that it is focused thinking; it helps me to figure out what I think and exposes flaws in my thinking. This is why I still diligently put in two hours a day writing; I don’t want AI to cause my thinking muscle to weaken.
Here’s an analogy: I used to have good handwriting. Typing killed it. Today I have worse handwriting than a doctor, and I did not even go to medical school.
This is why I strongly encourage my kids to write their own essays, and I go a step further by encouraging them to write daily.
Key takeaways
- AI, like past technological innovations, will disrupt existing jobs but also create new ones and potentially improve society’s standard of living, similar to how agricultural technology transformed the workforce over the past century.
- Embracing AI as a productivity tool rather than viewing it with a victim mentality is crucial for adapting to the changing job market and benefiting from its potential.
- AI’s impact on industries could be as transformative as electricity, with potential to significantly improve sectors like healthcare and reshape power dynamics in industries such as travel.
- The quality of company management and their approach to embracing AI will be increasingly important factors in investment analysis and company success.
- While AI can generate impressive creative output, it has limitations. It’s essentially a “self-licking lollipop” that reinforces its own knowledge, potentially limiting true creativity and innovation if relied upon too heavily.
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