Part 4/7:
Economic Implications of Each Scenario
In the incremental adaptation scenario, productivity gains should theoretically lead to economic growth; however, it may also produce an overhyped perception of gen AI's potential. If the reality does not align with market expectations, this could lead to market corrections. Financial stability may suffer if the gains from gen AI do not materialize as anticipated, provoking layoffs and demanding retraining for affected workers.
Conversely, in the transformative change model, the rapid advancements facilitated by gen AI may create significant economic churn, forcing us to rethink the structure of the labor market. While some labor demands may dissipate, new job categories could emerge requiring a different set of skills.