1、March 2024Generative AI and the future of New York The generative AI revolution will disrupt Americas biggest labor market,but its impact may not be what you expect.This article is a collaborative effort by Linda Liu,Maurice Obeid,Anthony Shorris,Gurneet Singh Dandona,and Yael Taqqu.At a glance The

2、labor market in the New York region faces several critical challenges.These include too few workers to meet overall demand,stagnating productivity,and yawning inequities across geographic areas and demographic groups.Generative AI(gen AI)provides an opportunity to address aspects of these challenges

3、,while creating some new obstacles.Overall net employment in the New York region is expected to continue to grow,increasing by about 1.8 percent through the end of the decade.While positive,that is lower than the 4.2 percent net employment growth estimated for the nation during the same period.The e

4、volving nature of work means the mix of jobs in the New York region will likely change substantially in the next few years.By 2030,as many as 1.1 million occupational shifts may be required in the New York region,and one-thirdor approximately 380,000 of these shiftsare directly attributable to the i

5、mpact of gen AI.The technology affects a far broader range of occupations than existing automation technologies do and primarily augments work rather than replacing it.When factoring in other structural and technological shifts alongside gen AI,the New York region stands to gain up to 700,000 jobs.T

6、his gain will be fueled by heightened demand for healthcare and engineering professionals,construction workers,and transportation service personnel.However,the growth will be partially offset by 600,000 positions that could be affected in office support,customer service,and food service and producti

7、on,precipitated by accelerated automation and deliberate cost-shifting strategies beyond the regions boundaries.Gen AI could help ease the regions worker shortage,revive productivity growth,push people toward higher-value roles,and unleash creativity.Yet doing so while minimizing the potential negat

8、ive impact on workers requires the committed and coordinated engagement of public,education,and private sector leaders across Americas most important economic region.The greater New York region has a long history of evolving its economy to meet the demands of new markets,technologies,and trends.Hund

9、reds of thousands of New Yorkers change jobs every year to increase their earnings,reach their potential,or adjust to shifting demands for labor.1 Neighborhoods such as Manhattans Far West Side have evolved from oyster reefs to shipbuilding and warehouses and are now the home of Google and the High

10、Line.For centuries,automation has been a driving force for much of that churn,and today,the latest force for changebroadly described as gen AIwill drive further and faster evolution in the ways of working and the demand for labor.Gen AI is shifting the New York regions work landscape and job market.

11、The evolving technologys advanced natural language capabilities have extended the possibility of increased productivity to a much wider set of job activities,including writing code,designing products,creating marketing content and strategies,streamlining operations,analyzing legal documents,providin

12、g customer service via chatbots,and even accelerating scientific discovery.Our analysis of McKinsey Global Institute research found that even without gen AI,by 2030,ongoing technological advancements could automate up to 20 percent of total hours worked in the 1“New York job opening and labor turnov

13、erJune 2023,”US Bureau of Labor Statistics,updated August 22,2023.2Generative AI and the future of New Yorkdynamic economic market of the New York region(defined for this article as the New York combined statistical area CSA,with more than 12 million workers).A comprehensive analysis indicates that

14、the unparalleled capabilities of gen AI have the potential to elevate this figure by an additional nine percentage points,reaching up to 29 percent of total hours worked(Exhibit 1).This transformative influence of gen AI is expected to reshape the fundamental nature of numerous occupations,instigati

15、ng a shift toward novel roles that will emerge concurrently with the phasing out of traditional positions.Exhibit 1Automation adoption for current work activities,New York combined statistical area,%Source:Current Population Survey,US Census Bureau;O*NET;US Bureau of Labor Statistics;McKinsey Global

16、 Institute analysis Generative AI will accelerate automation adoption of up to 29 percent of work hours in the New York combined statistical area by 2030.McKinsey&Company202320242025202620272028202920302033420350-percentage-point increase by 20302920Midpoint scenario with gener

17、ative AI accelerationMidpoint scenario without generative AI acceleration3Generative AI and the future of New YorkThis changelike so many before itdoes not mean the region will lose jobs overall,similar to how the lost jobs of clothing manufacturers in the Garment District were replaced by media and

18、 tech jobs generations later.But gen AI will accelerate a shift in ways of working for hundreds of thousands of workers in different ways and to different degrees.Because the technologys distinctive capabilitiessuch as enhanced natural language processing and understandingcan expedite basic,manual,a

19、nd higher-level cognitive tasks,it will affect the workforce at both ends of the income and skills spectrums.Activities anchored in decision making and collaborationsuch as those undertaken by financial analysts at Wall Street banks and programmers at Union Square tech start-upscould see the biggest

20、 changes caused by gen AI.We estimate that for workers in these roles,the potential share of hours affected by automation will increase by 27 to 38 percentage points.2 For example,gen AI could automate 56 percent of work hours spent on activities that involve applying expertise,such as planning and

21、designing facilities or conducting audits,compared with 18 percent without.In contrast,for jobs involving physical activity,whether maintaining vehicles or delivering items,the incremental increase in potentially automated hours of work due to gen AI may be only one to three percentage points(Exhibi

22、t 2).Unlike with prior technology shifts,workers with higher levels of education are the most likely to be affected:gen AI may increase the automation potential of tasks by 14 percentage points for people with masters degrees or higher by 2030,compared with an increase of five percentage points for

23、those who did not graduate from high school.Yet while gen AI presents significant challenges,it offers even greater opportunity.Although the technology may accelerate the automation of certain elements of jobs,it could also free workers to undertake tasks that involve applying expertise to decision

24、making and planning or managing and developing people.For example,new associates in Midtown firms could be freed to focus on complex matters of law instead of spending hours repetitively reviewing nearly identical documents.This could create entirely new roles to accommodate an expansion in creative

25、 work and encourage workers to harness new skills.And with the committed and coordinated engagement Gen AI will accelerate a shift in ways of working for hundreds of thousands of workers in different ways and to different degrees.2 McKinsey analysis of O*NET,US Bureau of Labor Statistics,and US Cens

26、us Bureau Current Population Survey data.4Generative AI and the future of New YorkExhibit 2Automation potential by type of work activity,New York combined statistical area(NY CSA),2023Activity groupsWith generative AIWithout generative AI1Overall automation potential and comparison in midpoint scena

27、rios,2023,%Decision making and collaborationApplying expertise1+38 p.p.256111Managing and developing peopleInterfacing with stakeholdersProcessing data Collecting dataPerforming predictable physical workPerforming unpredictable physical workData managementPhysicalSha

28、re of time spent in NY CSA,%ExampleactivitiesPlan facility layouts or designsConduct fnancial or regulatory auditsDirect employee training programsSupervise employeesPromote products or programsPresent infor-mation to the publicAnalyze market research dataModel operational processesMaintaincomplianc

29、e documentationMonitor organi-zational processesMaintain test equipmentDeliver itemsFabricate devices or componentsProvide basic healthcare servicesNote:Figures may not sum,because of rounding.1Applying expertise to decision making,planning,and creative tasks.2Percentage points.Source:Current Popula

30、tion Survey,US Census Bureau;O*NET;US Bureau of Labor Statistics;McKinsey Global Institute analysis Generative AI may have a disproportionate impact on tasks that were previously less exposed to automation.McKinsey&Company+28 p.p.2170+27 p.p.+20 p.p.+16 p.p.+1 p.p.+3 p.p.5Generative AI and the futur

31、e of New Yorkof all stakeholders,the net effect of gen AI could be to ease the New York regions worker shortage,reverse years of slowing productivity,and unleash worker creativity.Reinvigorating productivityAcross the United States,gen AI alone may increase labor productivity by up to one percentage

32、 point annually.3 This reflects the technologys degree of sophistication;for instance,McKinsey Global Institute analysis and interviews with industry experts suggest gen AI could accelerate the ability of machines to perform in the top quartile of human performance in natural language understanding

33、and social and emotional reasoning by 20 years.The combined effect of gen AI and all other automation technologies could boost labor productivity by up to 4 percent annually by 2030,with as much as a quarter attributable to gen AI.Realizing the full potential of the technologys benefits will require

34、 supporting workers in learning new skills and through any job transitions.In the New York region,gen AIs impact may help combat the overall trend of decelerating productivity:while New York Citys labor productivity grew by an average of 2.1 percent a year from 1947 to 2018,it increased by just 1.3

35、percent annually from 2005 to 2018 and by 0.8 percent from 2010 to 2018.4 Gen AI can increase the number of tasks automated in the region by as much as 2.4 billion hours by 2030,contributing to the productivity growth critical for sustaining the regions GDP growth in the face of the regions flatteni

36、ng employment and population growth.In this way,gen AI may also be an important lever to counter the impact of the regions aging labor force and the lingering effects of the pandemic,such as outward migration,the increase in remote and hybrid work,and higher job churn rates.5 Changing the work lands

37、capeGen AIs impact on how jobs are performed depends on the susceptibility of particular tasks to automation.For example,gen AI can quickly automate job activities requiring relatively basic cognitive skills.This could make more time available for job activities using technological,analytical,or soc

38、ial and emotional skills,which could in turn improve productivity and worker satisfaction.While the combination of gen AI and a series of other structural and technological changes may affect as many as 4.1 million people by 2030 in the New York region,we find that gen AI will not lead to a net loss

39、 of jobs,despite its ability to accelerate adoption of,and use cases for,automation.This is because automation does not occur in a vacuum.It has an important impact,but automation is just one factor in New Yorks evolving economy.Many other trends affect overall workforce demand,creating pull and pus

40、h across sectors and occupations today as it has for centuries in this global center of innovation.When we modeled 11 major trends affecting the labor forceincluding the accelerated pace of automation adoption from gen AI,the ongoing effects of the pandemic,federal investment in infrastructure,incre

41、asing demand for healthcare,and shifts to e-commerce and remote workwe found that the New York CSA could see net employment growth of 1.8 percent through 2030.Although lower than the national growth rate of 4.2 percent,that is a net increase of more than 200,000 jobs in the region.This net growth ma

42、nifests in a variety of ways.For example,demand for healthcare and STEM professionals,construction workers,and transportation service staff could add up to 700,000 jobs in the New York region by the end of 3“Generative AI and the future of work in America,”McKinsey Global Institute,July 26,2023.4 Mc

43、Kinsey analysis of O*NET,US Bureau of Labor Statistics,and US Census Bureau Current Population Survey data.5 For more,see“Population ages 65 and above for the United States,”Federal Reserve Bank of St.Louis,updated July 4,2023;Jeffrey M.Jones,“Remote work stable at higher rate post-pandemic,”Gallup,

44、September 15,2023;and“The pandemic impact on NYC migration patterns,”Office of the New York City Comptroller,November 2021.6Generative AI and the future of New Yorkthe decade.Multiple factors are driving this.The federal CHIPS and Science Act is putting additional funding into semiconductor manufact

45、uring as well as R&D and scientific research just as some companies are adjusting their supply chains,leading to an uptick in domestic manufacturing.While manufacturing is likely to boost employment demand overall in the years ahead,the sector is also becoming more high-tech and will involve fewer t

46、raditional production jobs but more workers with technical and STEM skills.At the same time,rising incomes and education levels will sustain jobs.An aging population will need more healthcare workers everywhere from world-class teaching hospitals to community health clinics and home care workers,whi

47、le the ongoing process of digitalizing the economy will require additional tech workers in every sector,despite some recent headlines related to layoffs.Conversely,this growth could be partially offset by as many as 600,000 jobs lost in fields such as office support,customer service,and food service

48、 and production.Contributing factors include automation,which will be further propelled by gen AI,the strategic outsourcing of costs,and the enduring impact of the pandemic prompting shifts in business modelssuch as the widespread adoption of e-commerce and rise in remote work that has affected comm

49、utes to downtown,retail shopping in Midtown,and dining across New Yorks famous food sector.We found that the New York CSA may require about 1.1 million occupational shifts by 2030(Exhibit 3),and one-third of those shiftsor approximately 380,000are directly attributable to the impact of gen AI.In fac

50、t,the technology primarily augments work rather than replaces it,and occupational categories most exposed to the technology could continue to add jobs through 2030(although the rate of growth may slow).Demographic differencesThese labor market changes are expected to affect populations differently.T

51、he advent of gen AI will likely lead to greater adoption of automation in Gen AI primarily augments work rather than replacing it,and occupational categories most exposed to the technology could continue to add jobs through 2030.7Generative AI and the future of New YorkExhibit 3Occupational transiti

52、ons by category,New York combined statistical area(NY CSA)1Note:Under midpoint automation scenario with generative AI acceleration.Source:Current Population Survey,US Census Bureau;O*NET;US Bureau of Labor Statistics;McKinsey Global Institute analysis More than one million workers in the New York CS

53、A may need to shift occupations by 2030a third due to the impact of generative AI.McKinsey&CompanyOccupational categoryOfce support26421.6196.995.288.680.358.027.625.723.418.715.113.811.75.94.32.21.71,090.72044110491.61.00.80.71.41.20.40.80.60.40.40.40.31.10.60.5012.3Customer service and

54、salesFood servicesProduction workBusiness and legal professionalsEducator and workforce trainingProperty maintenanceManagersCommunity servicesMechanical installation and repairBuildersTransportation servicesCreatives and arts managementHealth aides,technicians,and wellnessSTEM professionalsHealth pr

55、ofessionalsAgricultureNY CSAEstimated occupational transitions,202230,thousandTransitions as share of 2022employment,%Employment,2022,million people employed8Generative AI and the future of New Yorkhigher-wage roles,such as those in managerial and professional services occupations,compared with lowe

56、r-wage roles,including those in production work and maintenance.This shift is influenced by the fact that activities within higher-wage roles,once considered less susceptible to automation,have experienced significant advancements in automation.In the New York region,automation adoption in jobs with

57、in the top two wage quintiles is projected to be 1.9 to 2.0 times higher with gen AI,compared with no gen AI.On the other hand,jobs in the bottom two wage quintiles are expected to see a more moderate increase,with automation adoption up to 1.3 times higher with gen AI than without it(Exhibit 4).Exh

58、ibit 4Automation adoption per wage quintile in the New York combined statistical areaSource:Current Population Survey,US Census Bureau;O*NET;US Bureau of Labor Statistics;McKinsey Global Institute analysis Generative AI may accelerate automation adoption in higher-wage quintiles.McKinsey&Company0102

59、03040Quintile 1Automation adoption,2030,midpoint scenario,%With generative AIHigh wageLow wageQuintile 2Quintile 3Quintile 4Quintile 51.92.01.51.31.2Without generative AIDiference between automation adoption due to generative AI acceleration and adoption without generative AI acceleration9Generative

60、 AI and the future of New YorkNevertheless,a look at structural trends and past technological shifts that include gen AI as well as broader changes in the nature of work that were already under way shows that lower-wage jobs are more susceptible to more complete displacement.Our analysis finds the j

61、obs of low-wage workers in the New York region are 4.2 times more likely to be displaced than those of the highest-wage earners(compared with 14.0 times more likely across the United States).Non-college-educated workers could be 1.6 times more affected than those with bachelors degrees or higher(com

62、pared with 1.7 times nationally).Women,Latinos,and young workers are expected to be more adversely affected by job transitions precipitated by automation and other factors.As gen AI reshapes work activities for many occupations,the regions economy may end up with a larger share of high-wage,higher-p

63、roductivity jobs.Our analysis shows that the share of low-wage jobs in the New York CSA may decrease from 43.1 percent in 2022 to 41.6 percent in 2030,similar to the US average.And the share of high-wage jobs in the New York region could increase from 31.4 percent in 2022 to 33.5 percent in 2030,aga

64、in mirroring the national trend(Exhibit 5).Seizing the momentChange is rarely easy for individuals,families,communities,or even nations.Shifts in the nature of work affect not only companies but also,more critically,workers and the families they support.The speed of gen AIs appearance,adoption,and e

65、ffect on labor markets will likely be unprecedented by historical standards of technological change,this time affecting programmers in Bushwick almost as much as factory workers from the Bronx.Yet there remains a window of opportunity to address its impact.Mitigating the potentially negative effects

66、 of gen AI and harnessing its potential upside will require the committed and coordinated engagement of all stakeholders,including individuals and the private,education,and public sectors.Companies and government organization leaders may consider clearly assessing gen AIs risks,challenges,and opport

67、unities to avoid fragmented responses and exacerbating challenges in worker transitions.A unified approach is necessary to fully realize the positive impact of gen AI,navigate its complexities,and ensure that its integration aligns with broader societal goals for economic growth and sustainability.M

68、itigating the potentially negative effects of gen AI and harnessing its potential upside will require the committed and coordinated engagement of all stakeholders.10Generative AI and the future of New YorkExhibit 5Change in share of jobs in New York combined statistical area(NY CSA)by wage band,2022

69、30,1 percentage pointsShare of overall jobs by wage band in NY CSA,2%Breakdown of occupational categories by 2022 wage terciles,%202230 labor demand change,%Managers72601544362STEM professionalsHealth professionalsBusiness and legal professionalsCreatives and arts managementEducator and w

70、orkforce trainingBuildersCommunity servicesMechanical installation and repairOfce supportHealth aides,technicians,and wellnessCustomer service and salesProduction workTransportation servicesAgricultureFood servicesProperty maintenance20222030202230 change,number of jobsNote:Under midpoint automation

71、 scenario with generative AI acceleration.Figures may not sum to 100%,because of rounding.1Based on 2022 real wages(base year=2010).2Low wage:70th percentile.Growth from 2022 to 2030 holds 2022 wage categorization constant.The share of low-and middle-wage jobs in the New York combined statistical ar

72、ea could decline as the region adds high-wage roles.McKinsey&Company43.141.693,00022,00024.925.531.433.5338,000252864396279878055858794386873536979086796045.50.62.1Low wageMiddle wageHigh wage11Generative AI and the future of New YorkLeaders might consider the follow

73、ing questions to help the New York region capitalize on this moments positive potential and minimize its negative effects:Private sector.How can companies provide training and resources to help employees who will likely be affected by changing technologies acquire the necessary skills to work alongs

74、ide AI technologies effectively?Amazons Upskilling 2025 and its Technical Academy,alongside Microsofts global training initiative,Royal Dutch Shells Udacity partnership,and AT&Ts Future Ready Initiative,offer pathways from which to learn.6 Education sector.How can the K12 and higher education sector

75、s incorporate AI-related subjects and skills into their curriculums to prepare students for a technology-driven world?CUNYs free virtual Upskilling program,coupled with the New York State Department of Labors collaboration with Coursera,mark crucial initial steps in this endeavor.7 Public sector.Wha

76、t policies and regulations will promote responsible and ethical use of AI,and how can leaders of government organizations support initiatives that implement AI adoption and provide resources for training and development in AI-related fields?New York state,spearheading with its Empire AI Consortium a

77、nd reinforced by new legislative protections,stands at the forefront of national leadership in shaping our collective understanding.8 It is far too early to tell how history will judge the way the New York region addresses the gen AI revolution.In conjunction with many other forces driving change fr

78、om Suffolk to Bergen County,gen AI has the potential to shift the nature of occupations for bankers on Wall Street and creatives in Williamsburg,creating new jobs we cannot even imagine yet,and altering the mix of jobs in the countrys biggest labor market.Managing this disruption by harnessing this

79、technologys opportunities and mitigating its challenges requires all stakeholders to come together,something they have not always done in previous revolutions.If we get it right,the New York region can not only set an example for the nation but also address many of its deepest and most long-standing

80、 challenges.Copyright 2024 McKinsey&Company.All rights reserved.Linda Liu and Anthony Shorris are partners in McKinseys New York office,where Maurice Obeid is a senior partner,Gurneet Singh Dandona is a senior expert,and Yael Taqqu is managing partner and a senior partner.The authors wish to thank G

81、eorge Cary,Debbie Hong,Fabio Lessa,Joo Mathiazi,Andrew Shearer,Alok Singh,and Liam Tarzy for their contributions to this article.6 For more,see Amazon Staff,“Upskilling 2025,”Amazon,October 2,2020;Amazon Technical Academy website;Official Microsoft Blog,“Microsoft launches initiative to help 25 mill

82、ion people worldwide acquire the digital skills needed in a COVID-19 economy,”blog entry by Brad Smith,June 30,2020;Alex Varel,“Announcing our newest collaboration with Shell,”Udacity,February 14,2020;and Susan Caminiti,“AT&Ts$1 billion gambit:Retraining nearly half its workforce for jobs of the fut

83、ure,”CNBC,March 13,2018.7 For more,see CUNY Upskilling website and“Online learning with Coursera,”New York Department of Labor,accessed February 21,2024.8 For more,see“Governor Hochul unveils fifth proposal of 2024 State of the State:Empire AI consortium to make New York the national leader in AI research and innovation,”New York Governors Office,January 8,2024;“Governor Hochul continues New Yorks leadership on artificial intelligence with nation-leading actions to protect against deceptive uses of AI,”New York Governors Office,February 15,2024.12Generative AI and the future of New York