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And when the United States labor force participation rate is still lower than it was before COVID-19, it can add to the narrative of a bleak, dystopian future.
But as our friends at LikeFolio noted, the use of AI may not lead to as sinister of an outcome as many would first think:
We can look back to someone like Henry Ford, whose innovations were also viewed as disruptive and scary at the time but have benefitted and shaped the world: by changing the way manufacturing plants operate, changing the economy of a city, and changing the way people travel today. And as TheHenryFord.org eloquently states, “Henry Ford took inspiration from the past, saw opportunities for the future, and believed in technology as a force for improving people’s lives.”
And in terms of the drop in labor force participation, keep in mind that COVID-19 and an aging population have played a role. As of October 2021, more than 3 million Americans retired early because of the pandemic, which equaled more than half of the workers missing from the labor force from pre-COVID-19 levels. And by 2030, all baby boomers will have reached the traditional retirement age of 65.
There will be jobs at risk of being displaced because of AI and automation, as there always are when new technologies emerge, but these advances in technology can also create new jobs and more meaningful work.
Case in point is HireVue.
Anyone who is recruiting or hiring a new employee knows how time-consuming and expensive the process can be, and the worst-case scenario is that all that time, money, and energy only results in a new hire who just doesn’t work out.
HireVue helps companies screen and hire new talent with its video interviewing software, conversational AI, and pre-hire assessments.
It is used by 800 companies, including Kraft Heinz Co. (KHC) and Unilever (UL).
Using HireVue, Unilever saved £1 million ($1.2 million) in annual cost savings, increased hiring speed by 90%, and increasing certain hiring goals by 16%.
AI can also replace tasks such as answering routine customer questions, allowing employees to take on more needle-moving tasks that are more impactful for the business.
Investing in AutomationWhile the benefits of using AI to increase efficiency and remove mundane work is clear, with the routing of tech stocks in 2022, investing in automation and AI is still a little tricky.
Using the Global X Robotics & Artificial Intelligence ETF (BOTZ) as an example, nearly 77% of its holdings are in our Red Zone.
But one connected investable area to think about is the semiconductor stocks that help fuel automation.
For example, ON Semiconductor Corp. (ON) is a chip supplier that fuels emerging technologies like industrial workplace automation, energy infrastructure, 5G and cloud connectivity, and autonomous and electric vehicles (EVs).
Cryptocurrencies and blockchain technology are also investable areas that are ushering in automation.
While crypto investments will not suit everyone’s risk tolerance, they are currently experiencing a wave of adoption from financial institutions.
And one of the easiest ways to invest in innovation is to keep tabs on how companies are tapping into automation and AI to increase efficiency and save money, like Unilever did with HireVue.
Again, anything new that disrupts the status quo can seem scary, but ultimately, AI and automation are just technologies.
It’s up to us humans to decide how to harness them to make our lives better.
P.S. As we’ve seen with the advancement of AI, the world moves fast.
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