We are on the brink of a technological revolution that is set to redefine our industry – the advent of Generative AI. According to McKinsey’s latest research, this groundbreaking technology could contribute an astounding $2.6 to $4.4 trillion annually across 63 different applications. To grasp the enormity of this figure, consider this: it’s equivalent to adding between 57 million to 98 million new GBS jobs (with an average salary of $45k) to the global economy every year. This isn’t just a game-changer; it’s a whole new game.
AI can generate the value of approx. 57 to 98 million of GBS employees every year.
The influence of Generative AI will permeate all sectors, but it will be particularly transformative in customer operations, marketing and sales, software engineering, and R&D. These areas are expected to capture 75% of the value that generative AI could deliver. For GBS organizations, this implies a tectonic shift in our work paradigms, client interactions, and future strategies.
Take, for instance, the banking industry, where generative AI could potentially add an extra $200 billion to $340 billion annually. This is like adding the equivalent of 4.4 to 7.5 times the current BPO market value (approximated at $261.9 billion at the end of 2023) to the banking industry every year. Similarly, the retail and consumer packaged goods sector could see an impact ranging from $400 billion to $660 billion per year. These numbers aren’t just impressive; they’re revolutionary.
AI in banking can add 4.4 to 7.5 times more value annually than the total BPO market value.
However, this revolution brings its own set of challenges. Generative AI could automate tasks that currently consume 60 to 70 percent of employees’ time. This is a significant leap from earlier predictions, which suggested that technology could automate only half of the time spent by employees on work. The implications for the workforce are profound and warrant thoughtful deliberation.
The rate of workforce transformation is expected to quicken, with projections indicating that half of today’s work activities could be automated between 2030 and 2060. This is a full decade earlier than previous estimates. As leaders, it is incumbent upon us to guide our employees through this transition, equipping them with new skills and preparing them for new roles.
Generative AI holds the promise of significantly boosting labour productivity across the economy, but realizing this promise will necessitate substantial investment.
We must support our workers as they transition to new work activities or roles.
If we manage this transition effectively, generative AI could make a substantial contribution to economic growth and foster a more sustainable, inclusive world.
The era of generative AI is just dawning. The buzz surrounding this technology is tangible, and early pilots are promising. However, fully harnessing the benefits of this technology will take time, and we, as business and societal leaders, still have significant challenges to overcome.
We must navigate the risks associated with generative AI, identify the new skills and capabilities our workforce will need, and rethink fundamental business processes such as retraining and skills development.
This is a formidable task, but it is also an exhilarating opportunity. We have the chance to shape the future of our industry and position ourselves at the vanguard of this new era.
As GBS Leaders, we are well-versed in managing change. We have weathered the storms of disruption before, and we will do so again. But as we embark on this journey, let’s remember that change isn’t just about adapting to the new; it’s about creating the new. Let’s seize this opportunity to shape the future of our industry and ensure that we, and the organizations we lead, are primed for the era of Generative AI.
Trusted Advisor and award-winning GBS Independent Advisor in strategy, leadership and processes. I help organizations in the GBS Transformation.
Author the newsletter: “The Journey of GBS Leader” which is read by more than 1,100 GBS professionals every day.