March 18, 2026 · View in browser

The Insightful Leader

BY KELLOGG INSIGHT

Leadership advice from the Kellogg School of Management at Northwestern University

Good morning,

At the Oscars this past Sunday, the comedian Conan O’Brien led his opening monologue by saying, “I’m honored to be the last human host of the Academy Awards.”

It was said in jest, to be sure, but the idea that AI is coming for our jobs is a real and pressing concern—not just in Hollywood, but also in the minds of many business leaders today.

There is some good news, however. This week, Kellogg’s Benjamin F. Jones discusses how AI could actually benefit workers, even as it takes over people’s jobs. Plus, research by Kellogg’s Bryan Seegmiller and Dimitris Papanikolaou offers potential strategies that can help workers stay relevant amid the looming AI takeover.

Good news for workers

Faced with the prospect of being displaced, many people might root against AI. And that’s understandable. It’s only natural to assume that the more slowly AI progresses, the greater are our odds of staying competitive—and employed.

“But, in evaluating AI’s implications for the workforce, it’s misleading to think of AI as simply a replacement for labor,” says Jones, a professor of strategy and co-director of the Ryan Institute on Complexity. “To complete the picture, we need to consider the fuller set of forces that are unleashed when machines automate types of work.”

First, consider how technology affects prices. History has shown time and time again that the better machines get at automating a task, the more it drives prices down for consumers. Computers, for example, have become so incredibly efficient at routine clerical work, from mathematical calculations to telephone operation, that many of the services they provide are now virtually free. That leaves us with a trade-off: as technology gets more productive, it replaces more human work, but it also brings down prices, ultimately benefitting consumers.

The second critical factor is the way new technology reinforces bottlenecks. As AI gets increasingly good at automating certain tasks, it will remain subpar at performing others. As a result, tasks that AI does not or cannot automate will end up receiving a large share of economic value, and the humans who do them will be paid well.

“According to this logic, successful automation does not eliminate the need for human work,” Jones says. “Rather, it shifts the demand for labor, concentrating value and wages in the parts of the economy where human time remains the limiting factor.”

Together, these two factors offer a more-nuanced, if not counterintuitive, perspective of AI’s effect on the labor market. The better AI gets at automating tasks, the lower prices will likely be for those services and the more employers will likely pay for the work that AI does not automate.

In other words, “the labor side of the economy will be far better off economically if AI is much, much better than humans at the jobs it replaces,” Jones says. “So, if AI is going to beat us at a task, let’s hope it beats us by a mile. Then, ironically, labor may yet win.”

Taking advantage of AI

According to research by Seegmiller, Papanikolaou, and their colleagues, the jobs most at risk of having AI take over their tasks are white-collar occupations.

The researchers analyzed nearly 200 years of data on technological innovations and occupations. They found that, as the use of AI progresses in the workplace, relative demand for white-collar jobs declines, with blue-collar jobs picking up a larger share of workers.

That doesn’t necessarily mean white-collar workers should immediately switch to a profession that is less exposed to AI. But they should zero in on skills that AI can’t yet replace and take advantage of AI to perform better in other parts of their job, says Seegmiller, an assistant professor of finance.

For example, as AI automates some tasks, workers could focus on building skills that require a human touch, such as interpersonal communication, collaboration, and creative thinking.

Workers can also boost their productivity by using AI to perform simpler tasks for them. That might allow workers to “focus on the part where our added value is,” Seegmiller says. “Maybe that’s using these tools to become more productive at generating ideas or seeing the big picture.”