Professor Says Companies Use AI Mainly to Cut Jobs for Young Workers

A University of Michigan business professor said companies are deploying artificial intelligence mainly to improve efficiency and reduce costs. Speaking at Fortune’s Workplace Innovation Summit on Wednesday, the professor noted that young people are creating new forms of innovation outside traditional corporate structures.

He added that society has not prepared young workers adequately for the shift to AI. The professor said the focus on efficiency will remove many entry-level positions that have historically served as the first step for recent graduates.

According to analysis from the Federal Reserve Bank of New York, 5.6 percent of recent college graduates aged 22 to 27 are unemployed, compared with 4.2 percent for all workers. Job postings for early-career roles are down 2 percent from last year and 12 percent from pre-pandemic levels.

The professor said young people should seek smaller organizations that foster innovation rather than larger corporations that often acquire innovative startups. A Columbia Business School professor said successful innovation begins with thorough problem definition before moving to solutions.

She added that meaningful differentiation, not minor variations, is required to create value in the marketplace.