“The Economic Potential of Generative AI: The Next Productivity Frontier,” a major new report from McKinsey released last week, examines the immense scale and scope of AI and its probable impact on work and workers, with significant implications for reskilling. Key focuses include the following:
- McKinsey has raised their estimate of the percentage of employees’ time that could be automated with generative AI and other technologies to 60-70%, from their previous estimate of 50%.
- About 75% of the value that generative AI use cases could deliver falls across four areas: customer operations, marketing and sales, software engineering, and R&D.
- The report suggests generative AI will have a significant impact across all industry sectors, with banking targeted has one of the highest impact sectors. Across the banking industry, for example, the technology could deliver value equal to an additional $200 billion to $340 billion annually if the use cases were fully implemented.
Many of the big banks are already experimenting with embedding AI in some of their functionality. Some public comments in the past month:
Alternatives firms have been using data science and AI for some time. Please refer to my recent Forbes column, “Alternative Firms Use AI To Blend Best Of Human With Best Of Machine”.
Last week Russell Reynold’s Corporate Board Practice suggested some important questions for companies around rapidly evolving AI:
- Do we have the appropriate skillset on the board to provide the management team with the right counsel around AI?
- How are you thinking about the next phase of your technology and digital strategy in terms of the opportunities and risks that AI offers?
- Does the management team have the basic knowledge around the risks associated with this technology?
- Are the enabling oversight functions (such as data security and data governance) setup appropriately?
- How are your talent development and acquisitions strategies aligned with the impact of this technology?
AI continues to develop quickly, and executives are establishing frameworks for how to work with the new technology.
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