Scenario Planning for AI and the “Jobless Future”

· Source: AI & ML – Radar · Field: Business & Management — Corporate Strategy & Leadership, Human Resources & Workforce Development, Operations & Process Management · Depth: Intermediate, extended

Summary

This article explores the contradictory signals surrounding AI's impact on employment and proposes a scenario planning framework to navigate this uncertainty. It highlights recent reports of AI-driven layoffs at companies like Block and Salesforce, alongside studies from Vanguard and NBER suggesting AI-exposed occupations are outperforming in growth and wages. The author introduces a two-vector scenario planning model: "scale and size of impact" (AI capability and adoption rate) and "use of AI" (efficiency vs. doing more/solving new problems). This framework generates four possible futures: the Augmentation Economy, the Slow Squeeze, the Displacement Crisis, and the Great Transformation. The article also integrates economic theories from Garicano, Li, and Wu on task bundling and Alex Imas's concept of the "relational sector" and mimetic desire, suggesting that human-centric goods and services will become increasingly valuable as AI drives efficiency elsewhere.

Key takeaway

For executives weighing AI investment and workforce strategy, your focus should be on how AI can enable new products, services, or market expansion, rather than solely on cost reduction. Prioritize initiatives that leverage AI to "do more" and solve previously intractable problems, as this approach fosters growth and resilience across various future scenarios, including those with significant AI adoption. This strategy aligns with companies that capture the most economic gains from AI.

Key insights

Scenario planning helps navigate AI's uncertain job impact by imagining divergent futures and identifying robust strategies.

Principles

Method

Identify two key uncertainties as crossing vectors to create four quadrants of possible futures. Develop strategies that succeed across all quadrants, rather than betting on one.

In practice

Topics

Best for: Executive, Director of AI/ML, Entrepreneur, Policy Maker

Related on AIssential

Open in AIssential →

Editorial summary, takeaway, and curation by AIssential. Original article published by AI & ML – Radar.