‘Research around the world is also largely optimistic about the effects of AI on development. At the same time, experts also point to a number of negative effects of AI technologies Photo Credit: Getty Images/iStockphoto
Little did we know that beyond automated factory machines, self-driving cars and robocops, artificial intelligence (AI) would one day enter our lives, writing poems, tipping us off with pickup lines and helping us crack the toughest exams. Will pass The recent rise of large language models and generative AI has sparked more interest in AI progress around the world. ChatGPT had been up and running with its servers for months, and Twitter feeds were filled with bizarre ChatGPT quotes followed by threads highlighting the multifaceted application of such chatbots. The ethical debate over the use of generic AI has subsided with the realization that users will have a ‘productivity-driven’ edge over non-users. With the rise of AI, the topics of labor replacement and economic growth have entered the spiral that the Internet once went through.
Positive Effects of AI Adoption
There is broad agreement on increasing productivity by adopting AI in the production of goods and services. In a study titled “Generative AI at Work” (involving more than 5,000 customer support agents in the Philippines), economists at the Massachusetts Institute of Technology (MIT) showed that AI tools increased worker productivity by 14% and increased consumer satisfaction. improved, leading to better treatment. Increased customer service agent and employee retention. Experts suggest that generic AI may not replace the workforce, but employees using generic AI will replace those who do not have upskilling.
A recent survey among employees of LinkedIn’s top 50 companies in the United States shows that nearly 70% of them find that AI helps them be faster, smarter and more productive. Another 32% were of the opinion that although the current impact of AI may be modest, they expect major benefits over the next five years. MIT Professor Erik Brynjolfsson suggests that restructuring of business processes and increased investment are necessary to fully leverage the productivity potential of AI.
Research around the world is also largely optimistic about the effects of AI on development. A study by PricewaterhouseCoopers (PwC) predicts an increase of 14% or $15.7 trillion in global GDP by 2030 due to ongoing technological advances in AI. Furthermore, a report by Goldman Sachs Research in April 2023 stated that generative AI alone could boost global GDP by 7% or about $7 trillion over a 10-year period. The report highlights the potential for generic AI to create human-like outputs and its potential to break down communication barriers between humans and machines could have a large positive macroeconomic impact.
Forum for the Kent A. The Clark Center for Global Markets surveys and publishes the views of American and European economic experts on the impact of AI on the per capita income of the US and Western Europe. On the question of whether AI will result in a substantial increase in the growth rate of real per capita income in the US and Western Europe over the next two decades, 44% of US experts agreed with the expected substantial increase, while 46% agreed with its effects Did. were unsure. Among European experts, 34% expected a substantial increase in GDP per capita, while 42% were unsure about the effects of AI. Only 2% of experts believed that AI would not have a significant impact on GDP per capita; This included Stanford professor Nicholas Bloom, who pointed to historical data on slow GDP growth despite technological advances. On another question whether a ban on generative AI chatbots could have a negative impact on national innovation, 62% of European experts agreed that a ban could hinder innovation, 14% were unsure, and only 2% disagreed.
Employment can be adversely affected
Experts also point to a number of negative effects of AI technologies. The first is the labor replacement that AI technologies bring about. AI can automate repetitive tasks and with Generative AI, creative tasks can also be done efficiently and rapidly. A research paper titled “Robots and Jobs: Evidence from US Labor Markets” by Daron Acemoglu of MIT and Pascual Restrepo of Boston University found that robot adoption has, on average, a negative impact on workers – lowering labor share, employment and wages. It happens. These adverse effects primarily affect blue-collar workers and individuals with low levels of education.
In “Work, Automation, and the Rise of US Wage Inequality”, the two authors document that 50% to 70% of changes in the US wage structure over the past four decades can be attributed to declining wages relative to particular labor groups. Is. Routine work in industries experiencing rapid automation. Acemoglu argues that automation lowers the labor share and wages, especially when the productivity gains from automation are small. His other studies also highlight distributional concerns over automation leading to inequality among workers and potentially serious negative effects on social welfare. The European Parliamentary Research Service report cites research from the McKinsey Global Institute that suggests AI could increase competition and deepen the technological divide between companies. Early adopters of AI can reap significant benefits, creating a winner-takes-all scenario.
The Guardian puts forth the view that AI could be highly disruptive as it is more likely to displace middle class, white-collar jobs; In comparison, earlier technological advances displaced people from low-paying agricultural jobs to higher-paying factory floor jobs. Analysis by Goldman Sachs showed that 15%–35% of work in the US economy is exposed to automation. Nevertheless, the financial giant also cites statistics to show that this may not have an adverse effect on the labor market – “60% of workers today are employed in occupations that did not exist in 1940, meaning that more than 85% of employment growth compared to 80 years is explained by the creation of technology-driven new positions” – pointing to the potential for AI to create more jobs depending on how much it displaces Is. But of course, no conclusions can yet be drawn about how each upgrade affects the labor market.
opportunity for india
India, being the most populous country, should be cautious as any negative impact on employment can adversely affect the economy. The increased efficiency brought about by the adoption of AI in call centers and software industries does not bode well for the millions of Indians who work in this sector. Regulation on the use of AI is not a bright spot as it will drive away investment and new opportunities. The PwC report suggests that the biggest economic gain from AI will come from China, with a projected 26% increase in GDP by 2030. Thus, it would be prudent for India to focus more on education and training in AI; With the widespread acceptance of online education after the COVID-19 pandemic, it can be much easier now to take advantage of the demographic dividend and new opportunities arising out of AI.
AI has penetrated every aspect of the global economy, and its impact on productivity and growth is being viewed optimistically. Views on AI’s impact on the labor market and its impact on society are dismal, with 70% of US experts in the IGM survey agreeing that AI could pose deeper challenges to society, including the labor market, politics, data privacy, crime. and war; These challenges are difficult to anticipate and plan for. Governments will need to enhance their cyber regulations in relation to the new challenges posed by AI and may also need to tax capital to balance returns from capital and labor to reduce displacement and distributional effects, as many experts have suggested. suggested. Either way, the ever-increasing advances in AI are now a reality and arming ourselves with the latest tools will help us move forward along with everyone else.
And no, there won’t be an apocalypse anytime soon where robots take over the human world.
Santosh Kumar Dash is Assistant Professor at Institute of Rural Management Anand (IRMA), Anand, Gujarat. Siddhartha R. Research Associate at Center for Development Studies, Thiruvananthapuram