Why Not Fear but Embrace AI - Jevons Paradox
A recent flurry of AI coding assistant releases from Anthropic and OpenAI has created a sense of fear in the market, especially among the tech workforce. Is AI going to make human labour obsolete, or will it not make much of a difference - at least in the near term? We are hearing two extreme sides of opinion; however, reality likely lies somewhere in between.
When ATMs were introduced in the 1960s, many braced for the death of the bank teller. However, the availability of 24×7 access to cash led to increased consumer spending and demand for banking products. The bank teller’s job transformed to providing a variety of services. Since then for 40 years before the advent of digital banking, the number of bank teller jobs has grown faster than the overall labour force. Time and again, technologies initially feared as job killers have ultimately expanded opportunities.
Similarly, most modern-day jobs were unimaginable a century ago. When a good becomes more abundant, we find new ways to use it, and entirely new categories of work are created. History is filled with such examples - from coal consumption in the 19th century to data consumption in the 21st century. As William Stanley Jevons, the 19th-century English economist, observed: gains in efficiency often lead to increased consumption. This phenomenon is popularly known as Jevons Paradox.
Why Do We Fear It?
At the advent of any major technology, it is unclear how it will ultimately benefit individuals and corporations. The unknown naturally creates worry. However, that worry is often rooted in uncertainty rather than evidence. As technology matures and its applications become clearer, fear gradually gives way to understanding.
How Do We Overcome the Fear?
As in the case of bank tellers, who learned to provide a variety of new services as their roles evolved beyond dispensing cash, it is important to learn and adapt to changing realities. Embracing AI as an opportunity - for personal growth and organizational advancement.
