The Next Stage of the Artificial Intelligence (AI) Revolution Has Arrived -- Say Hello to Digital Labor

The artificial intelligence (AI) revolution has been transforming industries and societies for decades, but a new stage has arrived: the rise of digital labor. This shift is characterized by the increasing demand for AI skills across various sectors and occupations, leading to significant changes in wages, job displacement, and the nature of work itself.



According to a study by Burning Glass Technologies, the demand for AI skills has grown four times over the period from 2010 to 2019. This growth is not limited to IT-related industries and jobs, but is also prominent in sectors such as Information, Professional Services, Administrative and Support Services, and Finance. Among occupations, Computer and Mathematical occupations have the highest intensity of the demand for AI skills, followed by Architecture and Engineering and Science occupations. This widespread demand for AI skills is a key driver behind the growth of AI-driven digital labor.

Large firms with high cash holdings and high R&D investments are more likely to demand AI skills in their vacancies. This trend is further validated by the fact that the market size in the Artificial Intelligence market is projected to reach US$243.70bn in 2025, with an annual growth rate (CAGR 2025-2030) of 27.67%, resulting in a market volume of US$826.70bn by 2030. In global comparison, the largest market size will be in the United States (US$66.21bn in 2025), indicating the significant investment and growth potential in AI-driven digital labor.

The increasing demand for AI skills is expected to have a significant impact on wages and job displacement across various industries. Job postings demanding AI skills offer an 11% premium within the same firm and a 5% premium within the same job title. This wage premium is particularly substantial in Computer and Mathematical jobs, where AI is a valuable IT-related skill. However, the premium for AI skills also extends to other industries, indicating that the demand for AI-skilled workers is not limited to IT-related fields.

In terms of job displacement, the increasing adoption of AI may lead to the automation of certain tasks previously performed by humans. This could result in job losses in some sectors, particularly in occupations that are more susceptible to automation. However, it is important to note that the extent of job displacement will depend on various factors, such as the pace of AI adoption, the availability of alternative employment opportunities, and the ability of workers to adapt to new technologies.

The World Economic Forum's Future of Jobs Report 2020 suggests that, on current trends, job creation and destruction due to structural labor-market transformation will amount to 22% of today's total jobs between 2025 and 2030. This includes the creation of new jobs equivalent to 14% of today's total employment, amounting to 170 million jobs, but also the displacement of the equivalent of 8% (or 92 million) of current jobs. The net growth is expected to be 7% of total employment, or 78 million jobs.

In conclusion, the rise of digital labor, driven by the increasing demand for AI skills, is transforming various sectors and occupations. This shift is likely to lead to higher wages for AI-skilled workers across various industries, but the impact on job displacement will depend on several factors. The overall net effect on employment is expected to be positive, with a significant number of new jobs created. As AI continues to evolve, it is crucial for individuals, businesses, and policymakers to adapt and embrace the opportunities presented by this new stage of the AI revolution.