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Artificial Intelligence (AI) is increasingly transforming the economic and labour landscape, but its full impact is yet to be realised, according to a report by Merrill, a wealth management and investment division of Bank of America Corporation.
The report stated that the global economy is currently in an "in-between" phase where AI's effects have begun to emerge but are not fully visible. It noted that "we are somewhere in between AI's economic and labour impacts, having emerged but not yet fully realised," highlighting that generative AI is operating at a speed and scale that would have seemed implausible just a few years ago. According to the report, AI has already started disrupting the occupational mix, although it has not yet led to widespread displacement of entire job categories. It pointed out that the ongoing rise in business formation activity reflects the U.S. economy's ability to adapt and generate new forms of work amid technological disruption. The report also highlighted that generative AI is now capable of drafting text, writing code, analysing data, generating visuals and automating routine cognitive tasks. As a result, firms are increasingly embedding AI into their workflows. However, this has not translated into significant job losses so far. Citing data from the Census Bureau, the report noted that "over 94 per cent of firms using AI have not reduced headcount." At the same time, the report warned that AI could bring more profound changes compared to past technological innovations. Unlike earlier waves that primarily affected manufacturing and goods-producing sectors, AI's "creative destruction" is now focused on knowledge workers. The report also flagged concerns that digital technologies have already contributed to a declining share of labour in overall economic output, and AI could accelerate this trend further. It added that long-term productivity gains from AI will depend on the expansion of infrastructure, including technology hardware, data centres, network systems, power grid modernisation, and related electrical and cooling systems. The report emphasised that while AI's impact is now observable rather than hypothetical, its full implications are yet to materialise. It cautioned that future developments could significantly alter labour market dynamics. The report concluded that labour is being reconfigured as AI becomes more deeply embedded in the economy, even as large-scale job losses have not yet occurred. (ANI)
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