AI’s economic impact in 2024: A double-edged sword

Every time artificial intelligence (AI) comes up in conversations and the news, it is nearly impossible to go a few minutes without hearing how it’s poised to revolutionize our world and how we work. But like any transformative technology, AI has two sides. On one hand, it has the potential to enhance efficiency, generate revenue, and create entirely new roles. On the other, it threatens job security and displaces workers.

The truth is, AI is doing both: it’s allowing businesses to grow faster than ever before while simultaneously eliminating certain jobs.

Let’s take a closer look and see what kind of effect AI is really having on the economy when it comes to economic growth and employee displacement.

The upside: How AI is adding value to the global economy

AI is emerging as a powerful economic force and is positioned to add significant value to the global economy. While we’re still in the early stages of the “AI is essential to every business” era, the investments and infrastructure being built today lay the groundwork for exponential gains in the future. Companies are pouring resources into AI development, from direct investments in tech leaders to spending on infrastructure such as chips, data centers, and those that produce them.

Although these investments may take years to pay off, the potential returns are sizable. According to the International Data Corporation (IDC), every $1 spent on business-related AI solutions today is expected to generate $4.60 in the global economy by 2030. The driving force behind this value lies in AI’s ability to unlock new efficiencies, automate time-intensive tasks, and free up resources for innovation and growth.

From now until 2030, IDC predicts that AI will pump $19.9 trillion into the global economy. By the decade’s end, AI is expected to account for 3.5% of total global economic output. However, these gains won’t just come from more efficient businesses; they’ll also stem from new revenue streams created by AI that weren’t previously possible. But while the economy is expected to experience significant growth thanks to AI, all of that growth does not come without sacrifice.

The downside: AI-driven job displacement

One of the fastest ways for companies to increase revenue is to cut costs—and for many businesses, labor costs (employees and contractors) are the largest expense. That being said, AI has proven to be a cost-cutting powerhouse. Reports analyzing the impact of AI in two industries found that these tools reduced labor costs by 27% on average, leading to an overall cost savings of 14.4%. These percentages may not sound astronomical, but the savings are significant when scaled across large organizations.

What may come as a surprise to many people is the group that is facing the greatest risk of job displacement. According to a Pew Research report, white-collar workers with bachelor’s degrees or higher are twice as likely to have jobs exposed to AI than individuals with only a high school diploma. This is because many at-risk roles require analytical, decision-making, and complex problem-solving skills—areas where AI excels. In addition, these positions often come with higher salaries, making them prime targets for automation as companies look to improve efficiency and trim costs.

In contrast, AI is less likely to replace jobs that rely on manual labor, emotional intelligence, or social support. This is because, in many instances, AI hasn’t reached the level of sophistication required to replicate the human touch in these roles. When it comes to physical tasks, robots are often prohibitively expensive to implement and maintain unless their buyers have deep pockets.

AI adoption is slow, but job risks loom

Despite all the talk about AI, its integration in the workplace remains relatively limited. Currently, it’s estimated that only about 3% of businesses use machine learning or natural language processing tools. While this number is expected to grow, widespread adoption will take time.

This slow uptake means that, for now, fears of AI taking over entire industries and displacing workers are probably overblown. But as more companies invest in and adopt AI solutions, the landscape will shift. AI will be used across more businesses, and more jobs will be at risk of being automated. Over time, even industries that have remained relatively untouched by AI—such as construction—may see significant disruptions as the technology and robotics advance.

Despite this economic reality of AI, we can’t simply look at the slow rate of adoption or the fact that it takes a significant amount of time for AI to break even from the time that it first gets implemented and prematurely conclude that AI is not a threat. As AI continues to evolve, workers across all skill levels will need to adapt to remain competitive.

In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.

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