From Layoffs to Startups: How AI Is Reshaping Work Culture
The AI revolution will lead to precarious work situations, but also unprecedented opportunities to run a small business more easily. While AI will easily replace mundane and routine tasks, it will also enhance the output of knowledge work through its sheer compute power and wide informational range.
With increasing AI usage, large businesses such as accounting and law firms will likely lay-off associates, breaking up the firm into various smaller firms filled with dispersed ex-employees. These smaller firms could utilize AI to keep their overhead low and remain competitive. They could run fully online, while outsourcing administrative tasks to AI. The resulting competitive prices may entice clients to shift from the big firms to the little, new guy.
In preparation of such lay-offs, anyone concerned about AI should be considering: 1) reading up on AI workflow relevant to their industry, and 2) learning their industry’s craft quickly in order to become an expert. Both of these steps are necessary to successfully start a business.
One consideration is the prestige a new firm would command. Those ex-associates of big firms can leverage their resume to lend themselves credibility in order to acquire clients in the early stages. They may find it easier to retain such clients than the big firms, as the lowered overhead and increased flexibility of a smaller firm may lead to lower bills and a better responsiveness to client inquiries. However, AI alone would not be enough: to be well-suited to a variety of client matters, a small firm will require its employees to hold a variety of experience from the field and/or the founder requires a strong network to leverage for assistance on particularly unique client inquiries. For the latter scenario, building up a network of young professionals early-on is crucial. For the former, newly laid-off employees from a big firm would be actively looking for a position, which would fulfill the new firm’s labour requirements.
Of course, AI will be the linchpin of any new operation that requires competitive margins. As unfortunate of a trend as it is, any simple, routine work can be 60-80% outsourced to AI (assuming accurate parameters and instructions are provided). This reduces the salary costs of receptionists and administrative assistants. For knowledge-oriented work, legitimate AI companies will be consulted, with amendments made to fit the firm’s specific workflow. AI will augment a knowledge worker’s tasks by adding a search-function capability, and can read massive client documents with speed for the highlights. However, its discretion will never become human-like, as discussed below. As a result, experienced workers will always be required.
A founder should further consider increasing their AI’s expertise in the specific field by feeding into the AI some basic, background knowledge of the topic and requesting that this knowledge be treated as foundational. This would sufficiently increase the AI’s accuracy in providing expert guidance. For example, a law firm may insert all of the seminal philosophical texts that law is based on, e.g. books on natural law theory, essays on the concept of the rule of law. This should also include class notes produced during the founder’s legal education, i.e. class notes for entire courses, as background for the AI to rely on. These goldmines of information are easily obtained by a graduate, but are not necessarily available on google, nor are they normally within a generative AI’s basic spectrum of knowledge (which is originally inserted into the AI from fiction books, non-fiction books, Wikipedia, and various other online, accessible sources). An AI that is sufficiently trained on a large dataset – such as CoPilot or ChatGPT – will be able to ‘speak’ and ‘understand’ natural language. However, it would still require additional knowledge from a particular field in order to be an expert. Of course, one runs into the issue of copyrighted materials, which is a separate discussion. If this becomes a legal roadblock, AI systems oriented towards one particular field may eventually pay license fees to all seminal text writers, potentially increasing the AI’s cost.
However, some workers are risk-averse and prefer a ‘9 to 5’ job. Even for these workers it is now necessary to start studying their field on the side, since discretion will soon have a premium attached to it. While current and upcoming AI will possess the compute capacity of several interns or associates, the AI will very likely lack the discretion and big-picture knowledge that is necessary to discern fact from hallucination, and to determine the ideal strategy for client asks. Only an experienced worker is suited to make these final decisions. This need for discretion and macro-level knowledge will result in senior workers being more insulated than juniors when the inevitable wave of outsourcing arrives. Juniors who wish to be protected from such lay-offs must work now to position themselves as seniors: this will require accelerating the pace of their knowledge gathering in the meantime.
The AI revolution will dramatically change the landscape of the business work, including the nature of work itself. It remains to be seen what the structure of society will be once the dust settles.