Abstract
Abstract The current wave of technological change based on advancements in artificial intelligence (AI) has created widespread fear of job loss and further rises in inequality. This paper discusses the rationale for these fears, highlighting the specific nature of AI and comparing previous waves of automation and robotization with the current advancements made possible by a widespread adoption of AI. It argues that large opportunities in terms of increases in productivity can ensue, including for developing countries, given the vastly reduced costs of capital that some applications have demonstrated and the potential for productivity increases, especially among the low skilled. At the same time, risks in the form of further increases in inequality need to be addressed if the benefits from AI-based technological progress are to be broadly shared. For this, skills policies are necessary but not sufficient. In addition, new forms of regulating the digital economy are called for that prevent further rises in market concentration, ensure proper data protection and privacy, and help share the benefits of productivity growth through the combination of profit sharing, (digital) capital taxation, and a reduction in working time. The paper calls for a moderately optimistic outlook on the opportunities and risks from AI, provided that policymakers and social partners take the particular characteristics of these new technologies into account.
Highlights
Values, norms, and language have evolved over the last six decades
This paper aims at addressing this knowledge gap to gain a better understanding of the economic and social implications of artificial intelligence (AI)
Depending on the importance a company puts on training its workers, supervising them or aligning their workflows, different tasks may be regrouped to jobs from one company to another
Summary
Norms, and language have evolved over the last six decades. What has remained the same, is the fear of the machine. AI-based digital technologies may allow larger segments of the labor market to improve their productivity and to access better paying occupations and, thereby, may help promote (inclusive) growth This requires, that a certain number of policies are put in place that support the necessary shift in occupational demand, maintain a strong competitive environment to guarantee diffusion of innovation, and keep up aggregate demand to support structural transformation. This paper starts with a historical perspective on automation It argues that the rise in educational attainment has led to an increasing skill-biased nature of technological change, bringing fewer benefits for productivity but increasing inequality; it is against this background that the introduction of AI needs to be assessed.
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