Is the Global Economy Really Ready for AI?
In the science fiction version for the future of artificial intelligence, humanity is destroyed by our robot overlords as the only way to save people. But the actual fact of AI isn’t all hearts and flowers, either.
According to a study from the International Monetary Fund, the widespread use of artificial intelligence could wipe out a third of all jobs in advanced economies, including the U.S.
“Artificial intelligence can increase productivity, boost economic growth and lift incomes,” the IMF said. “However, it could also wipe out millions of jobs and widen inequality.”
The job displacement for emerging economies – 24% of workers – and low-income economies – 18% – are lower, but still significant.
That is a wide swath of society around the globe out of work. And the economic shockwaves will undoubtedly have political reverberations, creating a level of global uncertainty that is sure to keep equities markets nervous and corporate boardrooms on pins and needles.
But the potential economic impact of AI is usually only talked about as a net positive, increasing productivity, lowering costs and making people and organizations more efficient. There has been little concern and even less discussion of how to deal with fundamental changes in the global economy.
To its credit, the IMF report challenges governments to make preparations to meet the economic challenges of artificial intelligence, including expansion of social safety nets, investment in worker training and some measure of global coordination. All fine goals, but more pie-in-the-sky than across the negotiating table.
“Under most scenarios, AI will likely worsen overall inequality, a troubling trend that policymakers can work to prevent,” the IMF said.
But in a competitive global economy – particularly among the two top economic powers –the U.S. and China – finding common ground on the financial implications of AI will be easy enough rhetorically but far more elusive in any practical sense.
AI is all about gaining a competitive advantage using cutting-edge technology and maximizing profit. In essence, the next wave of capitalism.
This will hardly be the first time new technologies displaced workers and reshaped economies. And it likely won’t be the last.
Of course, this is mostly speculative at this point. Perhaps AI will be the next AOL and be devoured by newer and better technologies. Or maybe the integration of artificial intelligence into the economic fabric will be gradual and organic rather than rapid and jarring.
And we probably shouldn’t discount the possibility the science fiction writers were right all along.