AI is a looming threat to the global economy and the livelihoods of millions of workers. AI will automate and replace many jobs, especially those that are routine, repetitive, or low-skill. AI will also create new jobs, but they will require higher levels of education, training, and creativity. This will create a skills mismatch and a widening gap between the winners and losers of the AI revolution. AI will also disrupt existing industries and markets, creating winners and losers among countries, companies, and sectors. AI will increase inequality, instability, and insecurity in the world.
Machine Learning: World Towards Technological Unemployment? — Geospatial World
Artificial intelligence (AI) is one of the most disruptive technologies we will ever develop. It has the potential to radically transform how we live and work, creating new opportunities and challenges for businesses, workers, and society. But what are the economic implications of AI? How will it affect the distribution of wealth and power among countries, companies, and individuals? And what can we do to ensure that AI benefits everyone and not just a few?
AI is a broad term that encompasses various tools and techniques that enable machines to perform tasks that normally require human intelligence, such as vision, language, reasoning, and decision making. AI can be applied to almost any domain, from health care and education to manufacturing and entertainment. AI can also augment human capabilities, making us more productive, creative, and efficient.
However, AI also poses significant risks and challenges for the global economy. AI could disrupt existing industries and markets, create new winners and losers, and widen the gaps among countries, companies, and workers. AI could also have social and ethical implications, such as affecting privacy, security, democracy, and human dignity.
In this article, we will explore some of the possible economic impacts of AI based on the latest research and analysis. We will also discuss some of the actions that policymakers, business leaders, and individuals can take to prepare for the AI revolution and ensure that it is inclusive and sustainable.
The potential economic impact of AI
AI could have a huge impact on the global economy in terms of growth, productivity, innovation, and competitiveness. According to a recent report by McKinsey Global Institute1, AI could add about $13 trillion to global GDP by 2030, equivalent to about 1.2 percent annual GDP growth. This estimate is based on a simulation model that considers five categories of AI: computer vision, natural language, virtual assistants, robotic process automation, and advanced machine learning.
The report also suggests that AI could boost productivity by up to 40 percent by enabling workers to use their time more effectively and by enhancing innovation and creativity. AI could also create new markets and business models by enabling new products and services, new customer segments, new channels of distribution, and new ways of monetization.
However, the economic impact of AI will not be evenly distributed across countries, sectors, or firms. Some countries will be more prepared and able to adopt and absorb AI than others, depending on their level of development, infrastructure, skills, regulation, and innovation ecosystem. Similarly, some sectors will be more affected by AI than others, depending on their level of digitization, automation potential, data availability, and competitive dynamics. And within sectors, some firms will be more successful in leveraging AI than others, depending on their size, scale, strategy, culture, and capabilities.
The report estimates that leading AI countries (mostly in developed regions) could capture an additional 20 to 25 percent in net economic benefits by 2030 compared with today’s levels. In contrast, developing countries (mostly in emerging regions) could capture only about 5 to 15 percent1. This could widen the existing gap between advanced and emerging economies.
Similarly, within sectors, frontier firms (those that are at the forefront of technology adoption) could increase their market share and profit margins by using AI to improve their products, services, and operations. Laggard firms (those that are slow or reluctant to adopt technology) could lose market share and face declining revenues and profits. This could increase the concentration and inequality of income and wealth among firms.
And within firms, high-skill workers (those who have advanced education and cognitive abilities) could benefit from AI by complementing and augmenting their tasks and increasing their productivity and wages. Low-skill workers (those who have less education and perform routine or manual tasks) could be displaced or substituted by AI, reducing their employment opportunities and income. This could exacerbate the existing skill gap and wage gap among workers.
The challenges and risks of AI
AI is not only a source of opportunity but also a source of disruption and risk for the global economy. AI could have negative social and ethical implications, such as:
- Privacy: AI could enable unprecedented surveillance and data collection by governments, corporations, or malicious actors, potentially violating individual rights and freedoms.
- Security: AI could increase the vulnerability and complexity of cyberattacks, such as hacking, phishing, or ransom ware, or sabotage1.
- Democracy: AI could influence public opinion and political outcomes by spreading misinformation, propaganda, or fake news1. AI could also undermine democratic institutions and processes by enabling surveillance, censorship, or manipulation of citizens2.
- Human dignity: AI could challenge human values and identity by creating artificial beings that mimic or surpass human intelligence, such as robots, androids, or cyborgs. AI could also raise questions about the moral status and rights of these artificial beings and their relationship with humans3.
These risks and challenges require careful consideration and regulation to ensure that AI is used in a responsible and ethical manner. However, there are also difficulties and dilemmas in developing and implementing such regulation. For example:
- How to balance the benefits and risks of AI? AI could bring significant benefits for humanity, such as improving health, education, security, and well-being. However, it could also pose significant risks for humanity, such as harming privacy, security, democracy, and human dignity. How can we weigh these trade-offs and decide what level of risk is acceptable?
- How to ensure accountability and transparency of AI? AI systems are often complex, opaque, and autonomous, making it difficult to understand how they work and why they make certain decisions. How can we ensure that AI systems are explainable, interpretable, and verifiable? How can we assign responsibility and liability for the actions and outcomes of AI systems?
- How to align AI with human values and ethics? AI systems are often based on data and algorithms that may reflect human biases, prejudices, or preferences. How can we ensure that AI systems are fair, impartial, and inclusive? How can we ensure that AI systems respect human rights and dignity?
- How to foster trust and cooperation among stakeholders? AI involves multiple stakeholders with different interests, perspectives, and values. These include governments, corporations, researchers, developers, users, and society at large. How can we foster trust and cooperation among these stakeholders? How can we ensure that AI is developed and used in a participatory and democratic manner?
These questions are not easy to answer, and there is no one-size-fits-all solution. They require multidisciplinary and multi-stakeholder dialogue and collaboration to develop ethical principles and guidelines for AI.
The ethical principles and guidelines for AI
In recent years, there has been a growing interest and effort to develop ethical principles and guidelines for AI. These include initiatives by international organizations, such as UNESCO2, the European Commission4, the OECD, and the IEEE; by national governments, such as France, Germany, the UK, and the US; by industry associations, such as the Partnership on AI, the World Economic Forum, and the Responsible AI Institute; and by civil society groups, such as Amnesty International, Human Rights Watch, and Access Now.
While these initiatives vary in their scope, focus, and methodology, they share some common themes and values. Some of the most widely recognized and endorsed ethical principles for AI are:
- Beneficence: AI should be used for good and beneficial purposes, such as improving human well-being, social welfare, and environmental sustainability.
- Non-maleficence: AI should not be used for evil or harmful purposes, such as causing harm, suffering, or injustice to humans or other living beings.
- Autonomy: AI should respect human autonomy and agency, such as enabling human choice, control, and consent over the use of AI.
- Justice: AI should be fair and equitable, such as avoiding discrimination, bias, or exclusion based on irrelevant factors, such as gender, race, or religion.
- Transparency: AI should be transparent and accountable, such as providing clear and accurate information about its capabilities, limitations, assumptions, and outcomes.
- Responsibility: AI should be responsible and liable, such as ensuring that its developers, users, and regulators are aware of their roles and obligations in relation to the design, use, and oversight of AI.
These ethical principles provide a general framework for guiding the development and use of AI in a way that respects human dignity and rights. However, they are not sufficient by themselves. They need to be translated into concrete and enforceable regulations and policies at the national and international levels.
Several initiatives have been launched to develop and implement such regulations and policies for AI. For example:
- UNESCO has adopted the first ever global agreement on the Ethics of AI in November 2021, which provides a comprehensive and universal framework for guiding the development and use of AI in a way that respects human dignity, human rights, and human diversity1. The Recommendation also calls for international cooperation and dialogue among all stakeholders to ensure that AI is inclusive and beneficial for all.
- The European Commission has proposed a draft regulation on AI in April 2021, which aims to ensure that AI is trustworthy, safe, and respectful of fundamental rights2. The regulation also establishes a risk-based approach to AI regulation, banning or restricting certain high-risk AI practices, such as mass surveillance or social scoring, and imposing strict requirements and obligations on other high-risk AI applications, such as biometric identification or critical infrastructure.
- The OECD has developed a set of principles on AI in May 2019, which are endorsed by 42 countries and provide a common framework for promoting human-centred and responsible AI. The principles also call for fostering international cooperation and policy coherence on AI, as well as engaging with a wide range of stakeholders to ensure an inclusive and participatory approach to AI governance.
- The IEEE has developed a series of standards and guidelines on ethically aligned design of AI systems, which are based on a set of ethical values and principles derived from human rights. The standards and guidelines also provide technical and practical recommendations for addressing various ethical issues and challenges related to AI systems, such as transparency, accountability, privacy, or bias.
These initiatives are examples of how different actors and sectors can work together to develop and implement ethical regulations and policies for AI. However, there is still a need for more coordination and harmonization among these initiatives to ensure consistency and coherence across different regions and domains. There is also a need for more involvement and empowerment of civil society and marginalized groups in the process of AI governance to ensure that their voices and interests are heard and respected.
The conclusion
AI is a powerful and disruptive technology that will have significant impact on the global economy. It will create new opportunities and challenges for businesses, workers, and society. It will also raise fundamental ethical questions about what we should do with AI, what AI should do, what risks it involves, and how we can control it.
To address these questions, we need to develop ethical principles and guidelines for AI that respect human dignity and rights, and balance the benefits and risks of AI. We also need to translate these principles and guidelines into concrete and enforceable regulations and policies at the national and international levels. And we need to foster trust and cooperation among all stakeholders to ensure that AI is developed and used in a responsible, inclusive, and sustainable manner.
AI is not only a technological challenge, but also a social and ethical one. It requires us to rethink our values, norms, and institutions, and to engage in a collective and democratic dialogue about the future we want with AI. Only then can we ensure that AI serves humanity, and not the other way around.