With slow productivity growth of around 1.4% despite groundbreaking advances in technology and innovation, increasing growth – and average household income – may depend on a simple equation. “I have my number of employees and my output per employee,” explains Kweilin Ellingrud, director of the McKinsey Global Institute. “Either I change the number of employees, which is difficult because of the aging population, or I invest in technology and AI, and change the equation of my output per employee.”
More technology, implemented sensibly, could be the only solution to regain higher productivity growth, said Ellingrud, who spoke Thursday during a panel at McKinsey’s Media Day in New York. That’s why it’s long past time to take AI seriously, regardless of industry, she said.
Brooke Weddle, a senior McKinsey partner who spoke alongside Ellingrud, said the productivity question begins and ends with what she calls “organizational health.” To her, this describes a company’s ability to “take a strategy, translate it into the operating environment, execute it and renew itself over time through innovation and greater customer focus.”
According to McKinsey’s latest research report on the state of AI, also released Thursday, the link between an organization’s health and performance is “as strong as ever,” Weddle said. “In achieving productivity gains, it will be more effective to run the organization from the top.”
This means that jobs will have to evolve. Between now and 2030, the U.S. business landscape will experience extensive disruption on the scale of “approximately 12 million” occupational transitions, Ellingrud said. Some of that will be good news: more jobs in a handful of sectors, including health care, construction and education.
But much of that disruption will be “dramatically shrinking jobs,” she predicted. About 85% of the operational transitions McKinsey has seen fall into four categories, Ellingrud explains: Administrative assistance, customer service or sales, food service, and production and manufacturing.
“Those four jobs will disappear and trigger transitions,” Ellingrud said. “We talk about generative AI because it changes the nature of the work we do. It will affect about 30% of our operations, but it will not eliminate our jobs. But that will be the case for those four categories.”
The writing has been on the wall for some time now. Quite a few white-collar jobs will soon shrink dramatically, says Joseph Fuller, a professor at Harvard Business School and co-leader of the Managing the Future of Work initiative. Fortune last summer. “I wouldn’t want to be someone who reads or summarizes business books and then sends out 20-page summaries because AI is already very good at summarizing.”
Nigel Vaz, the CEO of Publicis Sapient, a consultancy focused on digital transformation, recently said this Fortune he believes there will be “no job that doesn’t integrate some form of AI in a very meaningful way, even in the next five years, in the next two years – I mean that.” Whether you’re a janitor, security guard or designer, you’re not immune: “AI will be integrated in each of these areas, even if you don’t know it,” Vaz said.
Furthermore, a recent report from Goldman Sachs found that continued developments in generative AI could add nearly $7 trillion to global GDP – and boost productivity growth by 1.5 percentage points over the next decade.
The only way to make a living, if you work in any of the industries Ellingrud mentioned, is to continually unlearn and relearn the most crucial skills, including technology skills. According to Vaz, this is mainly because AI is “probably the biggest change humanity has seen since the wheel, or electricity.” In other words: it is not the kind of innovation that you can comfortably rely on.