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LIVE welcomes Dr. Xi Kang to talk about the future of AI in the Workplace

Posted by on Wednesday, October 9, 2024 in Uncategorized.

Last week we were honored to welcome Dr. Xi Kang, Assistant Professor of Strategy at the Owen Graduate School of Management for her talk “AI Adoption in the Workplace and the Future of Work”. 

There is no doubt that AI is top of mind for leaders across all industries. We are all asking the same critical question: how will AI impact work as we know it? Popular media is pretty divided. Some argue that we will see lots of labor displacement as AI replaces workers, thus raising unemployment rates. Optimists argue that AI will augment workers, leading to higher productivity and the creation of new jobs.

Kang explains that the answer is not so straightforward, and will likely fall somewhere in the middle. Unsurprisingly, the effects of AI will be felt differently amongst different fields. She cites professions such as behavioral therapists, nurses, and doctors as ones unlikely to be automated, whereas occupations including insurance underwriters, mathematical technicians, or tax preparers are at a higher risk. A 2024 study she cited found that when considering current and likely future Large Language Model (LLM) capabilities, more than 46% of current jobs could have half of their functions impacted by AI in the very near future.

Kang presented her recent paper “Machine Predictions and Causal Explanations: Evidence from a Field Experiment”. Kang and her co-author Hyunjim Kim of INSEAD partnered with a leading financial research firm, and ran experiments across their mutual fund analysts globally. They analyzed the impact of AI on the analysts’ decisions as well as their causal explanations for these decisions. 

Their results were quite impactful. While AI usage did improve some decisions made by analysts, there was a clear tradeoff: justifications for decisions, which worsenedfor less experienced workers, This brings up the key point: just how important is the rationale behind decision making? Kang explained that explanations are critical to aligning stakeholders, mobilizing resources, managing other workers and learning from decision making. Therefore, this tradeoff is a criticalone.

Kang broke down the differences in results between new analysts and more experienced analysts. She explained that newer analysts saw the greatest improvement in “correct” decisions with the help of AI, however, their ability to explain and fully understand the decision worsened. Experienced analysts did not see this same reduction in causal explanations. The specific impact on newer analysts raises the question of whether overreliance on AI can hinder the learning process. Kang explains that while there are many challenges, AI can be a very powerful tool for firms, but that interpersonal and critical thinking skills will only become more important.

It was a great pleasure to hear from Dr. Kang, and we look forward to continued interaction with the Owen School of Management. Check out our events page for information about upcoming programming in our LIVE Learning Innovation Series.

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