Do you want to take away the hard work with AI? Be careful what you wish for

I’ve asked several companies over the past few months how they’re using novel generative AI models from companies like Microsoft Corp., OpenAI and Alphabet Inc.’s Google, and a common theme is automating hard work, the kind you’ll give to a new recruit, such as conducting market research or writing reports. That might make sense on the surface, but as with any technological revolution, there will be a price, one that both companies and graduates will have to pay as AI raises the bar for starting a career.

An example of this trend comes from Man Group Plc. The British hedge fund has been using a broad language model to synthesize lots of unstructured market data from external sources into concise paragraphs that are presented to its portfolio managers. That work is typically done manually by junior analysts. “Now they can work on higher-value things,” says Tim Mace, the company’s general manager of data and machine learning.

The same thing is happening at some of Wall Street’s largest banks, which have been experimenting with artificial intelligence tools that can instantly answer questions about publicly traded companies or generate one-page reports and presentations, work typically done by analysts who have just reached the bottom rung of the investment banking ladder. Top executives at Goldman Sachs Group Inc., Morgan Stanley and other banks have been debating the extent to which they can trim those incoming analyst classes, The New York Times reported in April.

A survey this year by the UK’s Institute for Public Policy Research found that low-ranking office jobs are 16% more likely to be taken over by AI compared to jobs for higher-ranking workers. “For a given job, entry-level positions are at greater risk than those of more experienced professionals,” the report says. It’s no surprise that common advice for adopting ChatGPT is to treat it “like an intern.”

What happens when companies automate entry-level roles? One result is lower costs, but there could be a trade-off. Hard work can be a valuable route to learning the tricks of the trade and developing the intuition needed in a position of greater responsibility. Sure, it can be tedious for a junior analyst at an investment bank to create a 20-tab Excel spreadsheet about a stock, or a 50-page slide deck about a potential deal, but the process can also help them develop a better sense of investment. company valuation. What in some industries is considered a hazing ritual and low-value work can be useful in training the next generation of senior managers.

It also poses an uncomfortable challenge for college graduates who aspire to professions like law and banking in the coming years. The New York Times even goes so far as to say that investment banks “will negate the need to hire thousands of new university graduates.” If future employers expect their young hires to perform high-level jobs, those graduates will need to demonstrate that they have that knowledge. higher level skills. In the next decade or two, that might even lead to a rethinking of how higher education prepares young people to enter a workforce in which they no longer do the work of interns but manage machines that are interns.

Of course, technology has been simplifying basic tasks throughout history, taking us from abacuses to calculators, from typewriters to word processors, and from libraries to smartphone databases. But generative AI represents a bigger leap: It not only automates routine tasks, it mimics human creativity and decision-making, threatening to erase entire junior job categories and closing established entry points to career paths.

Companies need to be mindful of how they define “low-value” work that is suddenly ready to be used. automation. It could be more valuable than you think.