## AI: A Future of Augmentation, Not Replacement Artificial intelligence (AI) is often seen as a disruptive force, capable of eliminating jobs and destabilizing economies. However, a new study by Vanguard suggests a more optimistic perspective: AI has the potential to be a general-purpose technology that boosts productivity, reshapes industries, and, most importantly, supports human work rather than replacing it. Joseph Davis, global chief economist at Vanguard, emphasizes that AI will have an even greater impact on productivity than the personal computer. His research indicates that, although AI-driven automation may lead to job losses in some professions (around 20%), the majority of jobs (about four out of five) will see a combination of innovation and automation, with workers increasingly focusing on higher-value activities. ## Implications for Businesses and Workers AI can serve as a copilot for various professional roles, performing repetitive tasks and providing general assistance. This will allow workers to focus on activities that require unique human skills. Davis highlights how traditional economic models often underestimate the potential of AI because they do not account for the deeper structural effects of technological change. Automation enhances worker productivity by handling routine tasks; augmentation allows technology to act as a copilot, amplifying human skills; and the creation of new industries creates new sources of growth. ## Implications for the Economy Ironically, Davis's research suggests that one of the reasons for the relatively low productivity growth in recent years may be a lack of automation in key sectors such as finance, healthcare, and education. AI has the potential to make a difference precisely in these sectors, which represent a significant portion of GDP and the workforce. Another challenge for the economy is represented by demographic trends, such as the retirement of the baby boom generation and the decline in birth rates. In this context, AI can help offset labor shortages, increasing productivity and automating certain functions. For example, in the nursing sector, AI can simplify data entry in electronic health records, allowing nurses to spend more time caring for patients. It is estimated that these tools could increase nursing productivity by up to 20% by 2035. ## Implications for Investors As AI technology spreads, the companies that make effective use of it will be the ones that achieve the best results in the stock market. This is because general-purpose technologies improve productivity, efficiency, and profitability across all sectors. The United States and China are currently leading the AI race, but other economies with low automation rates and large service sectors could also benefit.