Fitter, happier, more productive with generative artificial intelligence?

Conventional wisdom says as we live longer, an ageing population will drain the economy. But generative artificial intelligence (gen AI) has the potential to support an active older workforce by improving healthcare outcomes and extending careers by augmenting, not replacing, hard-won expertise. 

Silver tsunami: how ageing is shrinking workforces worldwide

Over recent decades, the global labour force has grown significantly, boosting GDP while helping to suppress wage growth. This expansion of the workforce has been fuelled by multiple factors, including the post-World War II baby boom and increased female participation in the labour market, as well as the integration of Eastern European and Asian countries – especially China – into global supply chains.

In many countries, however, this trend is now going into reverse. Increasing wealth, high levels of female employment and the cost of raising children are driving negative net reproduction rates, bringing the end of the demographic dividend. Japan is already suffering from a ‘demographic winter’ – and similar adverse weather can be expected in Southern and Eastern Europe, South Korea and particularly China. As a result, we predict that at a global level, the next five decades will see workforces shrink by approximately 4-5% every five years.

At the same time, increased life expectancy and the population bulge created as the baby boomer generation reach retirement mean a disproportionate number of people are of a pensionable age. In this scenario, governments, organisations and businesses cannot realistically sustain the generous pension schemes of the past, which are increasingly costly at the same time as government income from taxing the working-age population is falling. Instead, societies are obliging citizens to help defuse the ‘pensions timebomb’ by encouraging private pension savings and working for longer to fund their own retirement.

As well as boosting overall productivity, gen AI has significant potential to help extend healthy lifespans while supporting and augmenting the experience of mature workers in a range of professions. Understanding this dynamic can unlock significant long-term investment opportunities, in our view.

Gen AI: boosting productivity, transforming labour markets

Historically, technology has been the key enabler of productivity growth, albeit with a lag of several decades between new innovation and the arrival of its full benefits. The invention and adoption of electric power, motors and the computer are cases in point (see Figure 1).

FIG 1. Technologies such as the electric motor and computing drove past productivity booms¹

The emergence of gen AI is at least as important as the invention of the computer itself. Its ability to use unstructured data – which represents 80% of data available – make it a step-change technology with immense potential across almost every sector of the economy.

Initially, AI will mainly be used for automating relatively predictable repetitive tasks such as customer support and dishwashing. However, gen AI’s predictive capabilities give it the potential to be used for a wide range of tasks that could only previously be carried out by humans.

The latest iteration of gen AI, known as retrieval augmented generation (RAG), combines large language models (LLMs) with unstructured external information sources to vastly improve accuracy and efficiency. Its potential to vacuum random data and ‘learn’ means it can rapidly improve its performance in specific contexts.

FIG 2. Over time, generative AI will progress from predictable to more unstructured tasks²

Eventually AI could progress from routine work such as bookkeeping and telesales to optimising tasks like clinical diagnosis and conveyancing. It will also be able to assist with a range of more complex and creative jobs, from legal case building to military planning (see Figure 2 for estimates of these transitions, made in 2018 by AI expert Kai-Fu Lee). In fact, McKinsey estimates that up to 50% of today’s work tasks could be automated between 2030 and 2060.

Help the aged: gen AI’s implications for the older generation

Aside from its overall impact on productivity, gen AI has important implications for improving healthcare and extending working lifespans. Innovations in healthcare have been a major factor in rapidly improving life expectancy over the past century. However, the cost of treatments, along with the surge in lifestyle-related medical issues such as obesity and type 2 diabetes, is driving a shift in focus towards increasing healthy lifespans through a patient-centred, preventative approach.

Some healthcare companies are already using AI for a range of research and treatment tasks, and are exploring how gen AI can potentially accelerate progress in areas that include:

Medical imaging. Assessing medical images such as X-rays, CT scans and MRIs to help doctors identify conditions including cancer, bone fractures and neurological disorders

Telehealth and remote monitoring. Facilitating early detection of health issues and improving access to care through remote patient monitoring using sensors and connected devices

Precision medicine. Analysing data from electronic medical records, genetic testing and wearable devices to empower personalised treatment plans and preventative strategies

Drug discovery and development. Accelerating research and development by analysing vast datasets and identifying potential cures or treatments more efficiently.

By supporting the shift to preventative medicine, gen AI can help promote healthy ageing by potentially reducing the need for costly treatments while improving longevity and quality of life. All going well, this would enable people to have longer careers and maintain higher levels of productivity.

Augmenting human wisdom and experience with AI

Gen AI may provide the tools to keep the older generation in the labour pool, but will there be suitable jobs available for them to do? The technology itself has the potential to help make the answer a resounding ‘yes’. However, for this to happen, older workers will need to embrace it first.

A joint study by the US Government and European Commission predicts that older workers will be most exposed to the growing impact of AI on the workforce. This is because unlike existing forms of automation, it can perform tasks that traditionally require high levels of education and accumulated experience.

Yet this is not necessarily a bad thing. With AI performing routine, repetitive tasks and analyses of vast datasets, experienced workers will be able use their accrued wisdom to direct and manage the output and accomplish complex and creative work more effectively. For this kind of role, gen AI will be employed to augment human workers rather than replace them.

AI’s strength is the ability to identify patterns in huge volumes of data, from text, images and videos to music and computer code. Gen AI can then use these patterns to generate original content in almost any form, creating multiple possible solutions faster. From medicine to engineering, fashion design to agriculture, gen AI can be a valuable tool. For example, it can be used to virtually synthesise new drugs, with the most promising candidates being taken forward for real-world development and testing. Or it can analyse unstructured data on the weather, soil conditions, and pest and disease rates to develop recommendations that can inform farmers’ on-the-acre decisions.

However, while gen AI is extremely powerful, it cannot replicate the creativity, nuanced understanding, real-world experience and evolved decision-making skills a seasoned professional has gained. An expert in a given field will bring insightful context to a scenario, considering important factors such as business rules, wider strategy, regulations, ethics, past precedents and unintended consequences that pure algorithmic analyses can fail to identify. A human is also much better equipped to identify and react to errors or sudden, unexpected changes in the data, and AI is unsuitable for building and managing the complex stakeholder relationships required in many professions.

Silver rush

By helping older generations stay healthy and productive for longer, gen AI can help ageing people remain an asset for society. Increasing working lifespans can boost growth, reduce pressure on critical health services and extend the time people have to save for retirement.

Gen AI also has the ability to support and augment the skills of white-collar workers, expediting research and suggesting a broad range of options to inform decisions. That should allow older workers to focus on applying their accumulated expertise and experience to tasks that AI is less suited to, such as formulating strategy, adapting to unforeseen events and managing stakeholders.

Used in the right way, gen AI has the power to extend and enrich careers for individuals, and help create a more productive workforce overall. The potential opportunities this opens up are well worth investing in. Gen AI-augmented healthcare is an investment theme researched in our holistiQ³ fundamental equity franchise, and the rise of the ‘silver economy’ – characterised by the healthy ageing, ehealth provision, private pension savings and baby-boomer consumption – is the focus of our Golden Age equity strategy.