As AI creates a skills mismatch, Gen Z must choose: be a specialist or a ‘general-purpose nerd’

Entry-level corporate jobs are drying up, whether that’s due to AI or the prevalence of remote work, cutting off traditional avenues for launching careers. At the same time, demand for workers in skilled trades is booming amid the frenzy to build AI infrastructure.

Even more crosscurrents are at work. Baby boomers are retiring en masse, leaving positions to fill, and decades of declining birth rates have created a dearth of young workers.

Lightcast, a labor market data company, predicted in 2024 that U.S. employers will suffer “the largest labor shortage the country has ever seen” amid a demographic drought.

Georgetown University’s Center on Education and the Workforce estimated last year that the U.S. economy will need 5.25 million more workers with education and training beyond high school, warning that 171 occupations will face skills shortages through 2032 without massive increases in education.

Meanwhile, the proliferation of AI is making it easier to start a business with few workers—or even just one “solopreneur.”

So what’s a young Gen Zer to do?

Specialized talent

Economist and market veteran Ed Yardeni pointed to a recent surge in openings for professional and business services positions, saying they reflect the need for specialized talent required for AI adoption.

Companies with just one to nine employees saw the most openings, representing more business formation made possible by AI tools that lower the cost and complexity of entrepreneurship, he said in a note in June. But despite the surge in job openings, actual hiring was muted.

“That could be because the job openings AI creates are highly specialized, so talent is in short supply,” Yardeni explained, adding that it could also be the reason for higher long-term unemployment.

He noted the rise in tech job postings that require explicit AI fluency. In June, the share reached 75%, up from 67% in March and a 178% jump from a year ago.

Some of the fastest-growing skills are in areas like agentic AI, responsible AI and AI infrastructure, according to tech workplace platform Dice.

“AI is creating a structural skills mismatch as companies aggressively replace generalists with specialized talent,” Yardeni said. “We believe in the Jevons Paradox: As AI makes tasks more efficient, the falling cost of using that capability ultimately drives up total demand for it, making AI a net creator of jobs over time.”

‘General-purpose nerds’

Meanwhile, economist Simon Johnson, a Nobel laureate and MIT professor, has a different take. In an interview with the Financial Times in June, he used his daughters as examples of the two career paths young people face.

One daughter is interested in lab science, or the kind of high-value job that requires human judgement and is unlikely to be replaced by AI.

His other daughter is more of a generalist, Johnson said, adding that the advent of a new general-purpose technology, namely AI, requires “general-purpose nerds.”

“The general-purpose nerd is someone who can master the latest AI over the weekend. On Monday and Tuesday, they can interview real people face to face and learn things. On Wednesday, they can read a 50-year-old book that has not yet been digitised, make sense of it and figure out how you’re going to use it. On Thursday, they can run a podcast. On a Friday, they prepare a one-page memo for the minister,” he explained.

By contrast, a research assistant who simply looks up stock market data from Brazil, for example, could easily be replaced by AI.

But an assistant capable of integrating information, solving problems, and bringing solutions more quickly to leaders would be “quite appealing,” Johnson said.

For executives feeling overwhelmed by AI, he recommends they hire a general-purpose nerd, who is also a generalist outside of academics.

“I think young people getting life experiences, learning languages, traveling, understanding other people, being able to talk to people and listen face to face, and then combining these things, are going to be very valuable,” Johnson argued. “I think if you want to place your bets on something specialized, you need to think about where AI is going to come into that.”