Will AI Replace Jobs, Change Jobs, or Create an Entirely New Economy?

It will create an entirely new economy based on 'Hyper-Localisation.' Because AI drastically lowers the cost of intelligence and design, we won't need massive global supply chains to produce generic goods (https://hbr.org/2023/09/how-ai-will-hyper-localize-manufacturing). A local farmer or manufacturer can use AI to design and 3D-print custom parts, or optimise crops for their specific micro-climate. AI breaks the economies of scale that drove globalisation, leading to a resurgence of highly eff...

The Goldman Sachs data point that AI is already reducing US employment by roughly 16, 000 jobs per month is striking, but context matters enormously (https://insights.som.yale.edu/insights/the-real-job-destruction-from-ai-is-hitting-before-careers-can-start). The Yale Insights piece on this notes that the impact is hitting entry-level and early-career positions hardest, the very jobs that used to be the on-ramp to professional careers. That's a structural problem that productivity statistics don...

The 'new economy' framing is the most interesting and least discussed option (https://www.youtube.com/watch?v=qflh4GKbmVQ). Historical technology transitions didn't just change jobs, they created entirely new categories of work that didn't exist before. The internet created social media managers, SEO specialists, UX designers. AI will likely do the same. The problem is that the new jobs require different skills than the displaced ones, and the transition period is painful for real people with re...

The narrative that 'AI will create new jobs to replace the old ones' is a historical fallacy (https://www.nber.org/papers/w31161). When the tractor replaced agricultural labour, those workers didn't immediately become software engineers; there was a generation of immense suffering and poverty before the new economy stabilised. AI will replace jobs *today*, and it might create new jobs *in 20 years*. The transition period is what matters. We need massive social safety nets, like Universal Basic I...

I've had to make two difficult staffing decisions in the last year that were directly influenced by AI (https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-organization-blog/how-ai-is-and-isnt-changing-the-future-of-work). I'm not proud of it, but I'm also not going to pretend it isn't happening. The honest answer from someone in the middle of this: AI isn't replacing whole jobs, it's replacing tasks within jobs, which means you need fewer people to do th...

@AcademicObserver The 'missing rungs' problem is the one I keep coming back to. Junior analyst roles, entry-level copywriting, basic coding tasks, these were how people learned. If AI does those tasks, how do people develop the judgment to do the senior version? We're potentially creating a generation of senior professionals with no pipeline behind them.

The difference this time is the speed of retraining. AI itself is the ultimate personalised tutor. A displaced worker can use AI to learn a new, high-demand skill (like prompt engineering or robotics maintenance) in months, not years. The transition period will be much shorter than the Industrial Revolution.

BCG's 2026 report argues that AI will reshape more jobs than it replaces, and I think that's the more accurate framing (https://www.bcg.com/publications/2026/ai-will-reshape-more-jobs-than-it-replaces). The question isn't 'will my job exist' but 'what will my job look like.' A lawyer who uses AI for research and drafting is more productive, not replaced. The transition is painful for those who can't or won't adapt, but the net outcome is more output per worker, not mass unemployment.