Latest News

  • Home /
  • Latest News

Artificial Intelligence: Jobs created or jobs destroyed?

17 August 2023
By Model Portfolio Service - Investments Team

The launch of ChatGPT was an inflection point for artificial intelligence (AI) because of what it can do and the impact those activities could have on our daily lives. ChatGPT is the first public Large Language Model – a type of Generative AI. Generative AI can produce new and original content without human intervention as opposed to previous ‘rules-based’ AI which requires human input to decide the parameters for decision-making.  

Consulting firm Accenture estimated that around 40% of working hours could be impacted by AI Language models.Earlier in the year ChatGPT even passed the bar exam! It has the ability to change the nature of jobs and economies in the years to come but there are also concerns about intellectual property, data security, plagiarism and unemployment. 

When we develop the mix of investments in each portfolio, we consider how structural issues like technological advancements and changing labour markets will impact economies and how that influences different financial markets. That means considering questions like: How productive will workers be? How will new technology impact productivity? How will technology impact jobs? AI impacts the answers to these questions and following the launch of ChatGPT - what we think to be AI’s first key inflection point - we have been asking ourselves how we think AI will impact the labour market. 

Productivity gains

Technological advancements, such as AI, promote economic growth and improve living standards. We think Generative AI has the potential to drive innovation and create new industries, giving opportunities for new projects. An upward shift in productivity may provide a multiplier effect for economic activity. 
A repetitive task, such as answering customer questions, could be completed by AI. This could allow people to focus on higher value-add tasks and create an efficiency gain. Improved efficiencies mean earnings increase and costs decrease, leading to wealth gain. This increases discretionary spending in services leading to further labour demand. Of course this is reliant on the human being able to re-train into a higher value-add task and not being unemployed. 

Jobs created or jobs destroyed? 

We don’t think the adoption of AI is likely to increase unemployment. There will inevitably be jobs that become scaled down or even obsolete but there is no significant evidence to suggest that new technologies lead to enduring unemployment. This is because: 

  • Existing jobs are not all completely displaced but transferred through re-training. 

  • New technology can unlock potential for creating new jobs and even new industries. For example, the introduction of the smart phone created new jobs in application development and user interface design.

  • Higher productivity can lead to wealth gains which increases spending leading to further labour demand from companies. 

  • And specifically with AI, its weaknesses are that it can be poor at ensuring the quality, accuracy, and originality of its output. This means generative AI should not necessarily be seen as something that will replace people in the workplace. 

We think policy makers and regulators should be involved in the adoption of AI. Ensuring appropriate guardrails are in place is crucial to maximising the productivity gains and minimising the impact to those most vulnerable.  

Forward looking asset allocation 

Our approach to asset allocation focuses on where we see returns coming from over the next ten years. Doing this effectively means spending time understanding technological changes and how these will impact jobs and productivity. Technological advancements have helped reduce costs for business and consumers.  We think AI has the potential to change the nature of our economies in the years to come and given some of the structural headwinds we face, such as low productivity growth and ageing population, a leap in technological development may offer a new source of growth. 

1 “A new era of generative AI for everyone”, Accenture, 5 May 2023

8 July 2024

Triple Point – Join our CPD webinar: helping investors plan for big life events

1 July 2024

Intergenerational wealth planning for difficult times

24 June 2024

Liontrust Sustainable Investment: Annual Review 2023

19 June 2024

Investing in the energy transition

18 June 2024

Triple Point is partnering with ESG Accord to host a webinar: "A Practical Guide to SDR and Investment Labels for Advisers."

17 June 2024

Latest PruFund monthly investment updates

13 June 2024

Defaqto MPS Comparator: the UK's only accurate MPS performance tool

12 June 2024

Hear about Triple Point Venture VCT - 18th June 2024

6 June 2024

The Nucleus Retirement Confidence Index

24 May 2024

Join us for our Breakfast Briefing with Foresight! June 4th at 9:30am

17 May 2024

Looking forward with optimism

8 May 2024

The retirement income advice red paper

8 May 2024

Liontrust Views: Why smaller can be beautiful for US equities

7 May 2024

CPD Horizon Series: Tax planning for life’s key events

18 April 2024

Liontrust: Opportunities from secular growth trends

15 April 2024

Defaqto Roadshow - The challenges and opportunities of pursuing Income

11 April 2024

Liontrust: US small caps are overlooked and undervalued

4 April 2024

Q1 2024 Rebalance – we think the backdrop is good for stocks

21 March 2024

25 years of ISAs: a quarter of a century of tax-efficient savings and investing

4 March 2024

Stepping out of cash needn’t be daunting

26 February 2024

Managing lifetime wealth – trends in the UK retirement advice industry

23 February 2024

Empowering advice for women in finance

14 February 2024

Tech Matters is here!

5 February 2024

Defaqto upcoming event – Engage webinar 22nd February

1 February 2024

The gender divide in retirement confidence

30 January 2024

SDGs in focus: climate and nature

26 January 2024

Tax year end prep. We’re here to help.

8 December 2023

2023: Another momentous year for markets

8 December 2023

2024 investment outlook

7 December 2023

The 2023 Nucleus UK Retirement Confidence Index

4 December 2023

Paradigm's brand new Technology hub is here

4 December 2023

New service for advisers - Do you have UK clients with overseas assets/liabilities?

30 November 2023

Defaqto Upcoming events - Engage virtual

28 November 2023

Deepbridge Celebrate 2023 Growth Investor Awards Success

22 November 2023

5 reasons why EIS deployment timescales are so important

21 November 2023

November 2023 Asset Allocation Changes: Bonds looking better

20 November 2023

Blackfinch portfolio company Tended named ‘one of the best inventions of 2023’ by Time Magazine

10 November 2023

Value tracker: Where are the cheapest/most expensive stock markets?

9 November 2023

The Asia opportunity – looking for smarter growth

3 November 2023

The big headlines of quarter 3 2023

1 November 2023

Just launched: Octopus Titan VCT

24 October 2023

Understanding Portfolio Management

17 October 2023

It is fair to say that 2023 to date has been a slow year across the Venture Capital (VC) sector

11 October 2023

VCT’s evolving client profile: take another look at your client bank

6 October 2023

Death Benefits

5 October 2023

intelliflo - Building stronger client relationships through technology

4 October 2023

Puma Investments opens £50m fundraise for Puma VCT 13

3 October 2023

Family wealth planning - connected through you

29 September 2023

How well do you know your clients? (Survey + Amazon voucher offer)

25 September 2023

NOW OPEN – Octopus AIM VCTs are open to new investment

14 September 2023

Defaqto ‘Asset allocation – stick or twist’ roadshow

1 September 2023

New maternity law – are you ready?

17 August 2023

Artificial Intelligence: Jobs created or jobs destroyed?

10 August 2023

The big headlines of the second quarter 2023

7 August 2023

Cashflow modelling integral to the advice process

2 August 2023

Asian and emerging markets

28 July 2023

Investment Intelligence Seminars

25 July 2023

Embrace technology to focus on the value of advice

25 July 2023

Emerging-market debt: a potential source of protection and diversification?

21 July 2023

2023 Mid-year Investment Outlook

18 July 2023

25 years of the £2 coin - worth half its value to UK consumers since circulation

5 July 2023

Product and Platform Switching and The Consumer Duty

28 June 2023

How do we invest in the ESG themes range

16 June 2023

eAdviser Index proves the transformative power of technology

8 June 2023

10 tips for the countdown to Consumer Duty

1 June 2023

The easiest financial product to promote

31 May 2023

Invesco's flexible approach for navigating market uncertainty

15 May 2023

Our platform, your way

26 April 2023

Defaqto Spring Roadshow

24 April 2023

Adding value for your clients – Cash flow planning

21 April 2023

PruFund Growth and PruFund Cautious Client Facing Reports

19 April 2023

Puma VCT 13 hits £50 million fundraising target

17 April 2023

Book your free office lunch today

13 April 2023

What next for Open Banking?

22 March 2023

The future of adviser technology

14 March 2023

Property Insight: Commercial Real Estate is always late!

28 February 2023

Technology and the advice journey

23 February 2023

Get ready for tax year end

21 February 2023

Capability, low-cost and choice -retirement planning made easier

3 February 2023

Tax Year End Prep – PRU are here to help

1 February 2023

NOW OPEN – Octopus Ventures Knowledge Intensive EIS Fund

18 January 2023

Listed infrastructure… to the rescue

17 January 2023

Defaqto Engage – CIC Compare