Davos 2024: McKinsey's Noshir Kaka explains his 20-30-40-80 rule on Gen AI first movers

The comments come at a time when there are growing concerns over disruptive technologies such as AI and generative AI taking over jobs

Noshir Kaka, a senior partner at management consulting firm McKinsey, spelt out a unique “20-30-40-80 rule” on generative AI with respect to the tech services industry and how it can benefit the first movers.

He sees a 20 percent expansion of the target total addressable market in the form of new service lines, Kaka told Moneycontrol on the sidelines of the World Economic Forum 2024  in Davos. “For example, you could never ever do a one-on-one personalised advertisement in the past. Now you can actually have AI do that,” he said.

Kaka, who is also the co-head of the Global Telecom, Media, and Technology (TMT) practice at McKinsey, said he sees a 30 percent jump in productivity and 40 percent greater opportunity in support functions. “And finally, these firms are going to see an 80-100 percent increase in developer satisfaction,” Kaka added.

First movers in the generative artificial intelligence (AI) space will have a massive advantage in growth and efficiency but most importantly, in people, because  latest technology is where the “good talent” wants to go, Kaka said.

Also read: Too early to say generative AI is affecting jobs, says McKinsey’s Noshir Kaka

The comments come at a time when there are growing concerns over disruptive technologies such as AI and generative AI taking over jobs. "I think it is way too early to actually say that that's starting to affect the headcount,"  he said when asked whether generative AI would take over jobs of humans.

“If you look at the hiring pattern, most of these firms hired a lot of people when they saw pandemic-fuelled growth, so the de-growth you're seeing is essentially the supply catching up with where the demand is,” he said.

In the recently concluded December quarter, India’s top three IT companies reported that they had slashed a total of 16,254 jobs amid an uncertain demand environment. This came after four of India’s largest companies reported their workforce had been reduced by 21,213 in the second quarter.

Watch the full interview here.