Two years ago, I wrote a column suggesting that while everyone was making a fuss about the labor shortage, it was only a matter of time before we faced a surplus instead. For details, please refer to my earlier column.

Thinking beyond labor shortages (CEO Column, July 1, 2023)

In that piece, I gave familiar examples of how technological advances are quietly and unknowingly displacing human labor in various fields. I predicted that this technology-driven labor substitution would only accelerate in today’s environment, where labor shortages are such a serious concern and the need for automation is growing. I also suggested that, before long, technology-driven labor supply would outstrip demand, ultimately leaving us with a surplus of workers.

I imagined that:

• ・Technological advances were quietly taking over human labor day by day
• ・Labor shortages were accelerating technological progress, which would eventually lead to a surplus of workers

And, rather audaciously, I even wrote this: “For those who only see what’s occurring today, the labor shortage is a major issue, but for those who are in the habit of thinking on more of a macro level, the big question is how to support those who have been made obsolete by technology.”

Two years have passed since then, and a wave of news has emerged that seems to suggest I may not have been entirely off the mark. One such example is a report on job cuts at major U.S. tech firms leading the development of AI:

U.S. Tech Firms Cut 90,000 Jobs Despite Strong Earnings—AI Fuels Rising Pressure to Sort Out Engineers (Nikkei, August 5, 2025)

Some may argue that these layoffs are just part of a routine HR policy—constantly replacing lower performers with those making stronger contributions. But the scale and frequency of such cuts have increased sharply this year, suggesting that advances in AI are beginning to displace certain engineering roles.

I had anticipated that technological progress would gradually shift society from today’s labor shortages to a future of labor surplus—but I hadn’t imagined the shift would begin in such cutting-edge fields. That said, the more I think about it, the more sense it makes. AI, which is improving in accuracy every day, likely produces code that is more precise and elegant than that written by humans who are prone to errors and oversights. Also, unlike autonomous driving, writing code carries little direct risk of harming people.

In short, I believe it’s fair to say that AI has now begun to displace human jobs in a tangible way. We often see analyses of which jobs are most likely to be replaced by AI. While certain roles are indeed more vulnerable than others, the situation can be understood more simply: if a task that once required ten people can now be performed by five, the remaining five will be left without work. That’s the direction we’re headed. Forward-looking companies will reduce headcount, while those unable to adapt to technology will fall behind in competition. Either way, an employment crisis seems inevitable.

Some may offer a more optimistic view, saying that AI will create new jobs. To some extent, that may be true. But in a world where rapid technological progress is steadily taking over human work, it’s hard to see how new, uniquely human roles could keep emerging fast enough to outpace what’s being lost. Realistically, I can’t help but think that’s a tough ask.

After coding and other advanced fields, AI will likely move on to contributing to the creation of products and services. But unfortunately, AI has no personal desires—it doesn’t want to buy a house or a car, eat sushi or steak, or enjoy a glass of wine. In other words, unlike humans, AI contributes to production but not to consumption (aside from perhaps using electricity). This could tip the balance between production and consumption. As production becomes increasingly efficient, we may find ourselves needing to artificially generate demand just to keep up. That raises the question: could this lead to a persistent state of deflation? From this perspective, providing citizens with a guaranteed income, such as a basic income, to stimulate consumption seems like a conceivable solution. Still, even if such a measure were implemented, it would likely fail to solve the underlying supply-demand imbalance—and the ripple effects could trigger new forms of social instability.

According to the latest UN estimates, the world’s population now stands at 8.2 billion—which means there are 8.2 billion human beings, and 8.2 billion human brains. But now imagine a world where, in a short span of time, the number of “brains” increases by 10 billion—on top of the 8.2 billion people already here. It’s hard to believe that 8.2 billion humans and 18.2 billion brains could peacefully coexist. I can’t help but imagine that such a scenario would lead to considerable chaos. The advance of AI is forcing a type of change that humanity has never faced before—one so profound it could turn the world upside down. What’s going to happen? Where is this all heading?
These are the kinds of wild thoughts I find myself entertaining.

But then again, I will probably be dead by then, so maybe it’s not my problem.

Hirotaka Shimizu
Chairman and CEO
Kamakura Shinsho, Ltd.

Image material：PIXTA