The Brave New World of Artificial Intelligence

Until recently, the promise of artificial intelligence’s (AI's) transformative effects was just beyond the horizon. But with the proliferation of ChatGPT, with its simple interface and its ability to author insightful term papers and subject matter summaries, AI’s time to change life and business has arrived. 

Over the past several months, language learning models, the latest incarnation of artificial intelligence, have taken the world by storm. While the technology is still in its infancy, many are worried about the economic impact it will have on existing jobs and what it means for the future of work, including in construction.

While complicated in its operations, AI itself is straightforward in definition. According to ChatGPT, AI “refers to the field of computer science that focused on the development of intelligent machines capable of performing tasks that typically require human intelligence. AI systems aim to simulate various aspects of human cognition, such as learning, problem-solving, perception, and decision-making, and apply them to solve complex problems.” Among those problems could be how to organize a construction project along the dimensions of functions, accountability, and timing.

According to a University of Oxford report, nearly half (47%) of jobs in the U.S. could be replaced by AI over the next two decades. The good news is that the report emerged 10 years ago and while AI is rapidly gaining popularity, there has perhaps never been a peacetime moment in America during which workers were in greater demand. 

Still, few believe that AI’s impact will be as transient as that of 3D televisions or the Segway. The fact of the matter is that no one knows what the impacts will be. But they are likely to be massive since humans are no longer the smartest species, which means that the types of jobs historically most resistant to challenges from emerging technology stand to be the most vulnerable. Among the types of positions that could be potentially replaced in whole or in part are those of accountants, architects, engineers, and construction managers.

More recent research from Goldman Sachs estimates the percentage of jobs that could be replaced at a somewhat less alarming 25%. According to that report, administrative jobs are most at risk, with AI capable of automating 46% of tasks, followed closely behind by legal jobs, of which 44% of tasks could be automated. The construction trades would be among the least at risk, since AI lacks a physical component. That said, if one peers with sufficient distance into the horizon, the combination of robotics and AI could conceivably solve today’s massive and growing shortages of skilled craftspeople. 

But if one simply sticks to the world of AI, only 6% of construction industry jobs are at risk. Installation and repair jobs also rank low along the dimension of replaceability, at just 4%. Architects and engineers, especially young ones, suffer greater cause for concern. Goldman Sachs estimates that a bit more than a third of their current tasks and responsibilities could be performed using AI.

Likely Beneficial Impacts of AI on Construction

At the heart of construction’s contemporary trials and tribulations is a skills and labor shortage set to worsen for reasons related to demographics, economic transformation (e.g., reshoring of supply chains to America), public policy (e.g., infrastructure spending), and cultural factors (not enough young people entering the construction trades). With AI threatening white-collar segments in particular, it may be that young people become more likely to enter the skilled trades as pathways to prosperity during the future. 

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About the Author

Anirban Basu

Anirban Basu is Chairman & CEO of Sage Policy Group, Inc., an economic and policy consulting firm in Baltimore, MD. He is one of the Mid-Atlantic region’s most recognizable economists in part because of his consulting work on behalf of such clients as prominent developers, bankers, brokerage houses, energy suppliers, and law firms.

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