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Consultancy sees big changes for Norwegian employees. Norway is one of the countries that will be the first to be affected by the technology, according to the findings of the recent report.
Head of McKinsey Norway, Frithjof Norman Lund, foresees major changes in everyday working life.published: published:Less than 20 minutes ago
Copy linkCopy linkShare on FacebookShare on FacebookShare via emailShare via email– The technological changes we face are simply explained to give a better flow in daily work, says Frithjof Norman Lund, head of McKinsey Norway to E24.
The AI wave has long since swept across the world, leaving an imprint of both fear and excitement.
Most recently this week, Japan’s economy minister, Yasutoshi Nishimura, stated that he wanted a discussion about citizens’ wages as a result of AI making some jobs obsolete.
Nishimura is said to have stated that “we humans will have more time available” when robots, drones and self-driving cars become a bigger part of our daily lives, Bloomberg reports.
One of the key findings in a recent McKinsey report, “The economic potential of GenAI in Norway,” is that generative AI technology (GenAI) is significantly accelerating automation and is expected to account for up to half of all work tasks during the period from 2030 and 2060.
One in two Norwegians have work tasks that can be automated by more than 50 percent through GenAI implementation, according to the report’s findings.– We have gone from a gradual development to a sudden development. Compared to the past, we see GenAI accelerating automation in some areas by as much as a decade, says Lund.
According to the report, GenAIGenAIGenerative Artificial Intelligence (AI) describes algorithms (such as ChatGPT) that can be used to create new content, such as audio, codes, images, text, simulations, and videos. contribute to an annual productivity growth of between 0.3 and 0.7 percent until 2040 in Norway.
When GenAI is combined with existing artificial intelligence and other technologies, productivity growth can increase by between 0.9 and 3.7 percentage points per year.
– We believe that GenAI’s contribution to automation will be one of the most important drivers of economic growth in the coming years. For many, this means moving quickly to address opportunities and challenges that you wouldn’t have considered a year ago, says Lund.
Summary of the McKinsey report “The economic potential of GenAI in Norway”
The paper is based on McKinsey’s global report “The economic value of generative AI”, published by the McKinsey Global Institute (MGI) on June 14, 2023, and transfers selected elements from the main report to a Norwegian context to highlight the implications that GenAI technology can have for Norway.In all Norwegian sectors, GenAI technology has a value creation potential in Norway of between NOK 55 and 95 billion in 2030, and between NOK 95 and 159 billion in 2045, measured in GDP contribution.Business functions across all industries – not necessarily individual industries – have the greatest potential for value creation. The three largest measured in 2045 value are marketing and sales (NOK 28-43 billion), software development (NOK 21-43 billion) and customer contact and service (NOK 12-17 billion).For Norway, GenAI can contribute to annual productivity growth of between 0.3 and 0.7 percent per year through 2040. When GenAI is combined with existing artificial intelligence and other technologies, productivity growth can increase by between 0.9 and 3, 7 percentage points per year.The advent of GenAI technology will accelerate all AI deployments and could accelerate the automation of work tasks by an entire decade.Norway will be one of the countries where GenAI technology can accelerate the automation of work tasks first and fastest. This is because GenAI’s contribution will have the greatest effect on highly skilled workers, and in a global context, Norway has a relatively highly educated and digitally mature population.One in two Norwegians has work tasks that could theoretically be automated by more than 50 percent through GenAI implementation. If you look at the automation potential outside of GenAI, the number would beto two out of seven Norwegians.In an early scenario with rapid development and deployment, GenAI technology could help automate about half of all work tasks in Norway by the year 2030.view more
Quick development
The technological change of pace can pave the way for major structural changes, both for society and for each individual worker.
– We foresee major changes in daily work life. By adopting the technology, people can extract, analyze and present knowledge faster. In short, it will help us spend less time on repetitive work tasks, and it will increase efficiency and workflow in companies.
Lund cites as an example that job satisfaction has increased significantly for programmers when they have adopted GenAI in their daily work.
– Productivity skyrockets and they can focus on higher value tasks.
– I just believe that the jobs will become more exciting and rewarding if you filter out repetitive tasks that are boring, he adds.
Global technology trends affect the competitiveness of Norwegian companies and will consequently increase the timeliness and necessity for the adoption of GenAI for Norwegian industry and business, says the Norwegian head of McKinsey.
– This is a different game than before. The development is moving at an enormous speed, which means that you have to be much more progressive than with previous technological shifts in digitization and automation.
– If you fall behind and cannot seize the opportunities, it means that both Norway and individual companies lose their competitiveness.
Despite the benefits, Lund is also clear about the dark sides of the technology.
– GenAI gives us great benefits, but we also need to be aware of the risks. They can deal with anything from copyrights and biases in the algorithms to cybersecurity and the reliability of the answers themselves. This requires a high level of awareness from all of us.
GenAI technology will have a major effect on work tasks that require higher education.Norway at the top of the world
The background analysis shows that Norway is among the countries that can lead the wave of automation.
– One in two Norwegians have work tasks that can be automated by more than 50 percent through GenAI implementation. Excluding the GenAI effect, the number would drop to two in seven, Lund says.
In an early scenario with rapid development, the analysis shows that GenAI technology could help automate about half of all work tasks in Norway by the year 2030.
– Whether we reach this level as early as 2030 or later depends on the pace of development and implementation. But together with countries like the US, Germany and the rest of Scandinavia, we can lead the way in using the technology to automate work tasks, says Lund.
Education level determines pace and effect
Classical automation has long had a major impact on occupations that require less training, where GenAI technology will play out differently from previous technology shifts, the report found.
– The potential for automating work tasks for employees with a master’s degree or higher is twice as high compared to previous estimates that did not take GenAI into account.
It is mainly the high level of education of the population that increases the value potential of technology in Norway. The higher the level of education, the greater the effect of the GenAI technology is calculated.
– These are employees who spend a lot of time on tasks that can be automated with exactly what GenAI technology can contribute the most to. It can be anything from planning and interaction to analysis and creative tasks. Norway has a highly educated population and therefore the potential effect on us is large, says Frithjof Lund.
Increased value creation
In line with technological development, a number of work tasks have become obsolete throughout history. But technological changes have also created new industries.
– Earlier technological changes predicted the disappearance of entire occupational groups. We see it changing, and it will mean a significant change in the way of working and increasing the need for retraining. But it doesn’t necessarily mean that many people will lose their jobs, even though they will probably work differently than they do now, and we may see completely new industries and occupations emerge.
McKinsey Norway calculates that the total value creation potential from the implementation of the technology will be between NOK 55 and 95 billion, measured in GDP contribution in 2030.
– Nearly half of this potential lies in the use of the technology in two major functions, sales and marketing and software development. Here the value potential by 2030 is NOK 17–26 and NOK 13–26 billion respectively.
In addition to supply chain and operations, customer contact and service will also be two other key functions where the early stage technology will have a major impact across all industries.
– These are features common to many industries. This means that the vast majority of Norwegian companies will have to deal with the technology to a greater or lesser extent. Therefore, start mobilizing for GenAI today, because the changes ahead will be major, concludes Lund.
– One in two has work tasks that can be automated by more than 50 percent – E24
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