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AI and the Opportunity for Shared Prosperity: Lessons from the History of Technology and the Economy (2401.09718v3)

Published 18 Jan 2024 in econ.GN and q-fin.EC

Abstract: Recent progress in AI marks a pivotal moment in human history. It presents the opportunity for machines to learn, adapt, and perform tasks that have the potential to assist people, from everyday activities to their most creative and ambitious projects. It also has the potential to help businesses and organizations harness knowledge, increase productivity, innovate, transform, and power shared prosperity. This tremendous potential raises two fundamental questions: (1) Will AI actually advance national and global economic transformation to benefit society at large? and (2) What issues must we get right to fully realize AI's economic value, expand prosperity and improve lives everywhere? We explore these questions by considering the recent history of technology and innovation as a guide for the likely impact of AI and what we must do to realize its economic potential to benefit society. While we do not presume the future will be entirely like that past, for reasons we will discuss, we do believe prior experience with technological change offers many useful lessons. We conclude that while progress in AI presents a historic opportunity to advance our economic prosperity and future wellbeing, its economic benefits will not come automatically and that AI risks exacerbating existing economic challenges unless we collectively and purposefully act to enable its potential and address its challenges. We suggest a collective policy agenda - involving developers, deployers and users of AI, infrastructure providers, policymakers, and those involved in workforce training - that may help both realize and harness AI's economic potential and address its risks to our shared prosperity.

Citations (1)

Summary

  • The paper demonstrates that while AI has vast economic potential as a general-purpose technology, its benefits depend on strategic investments and a coordinated policy framework.
  • The paper employs historical technology trends to show that innovations often take decades to yield widespread economic gains, highlighting the need for complementary workforce skilling programs.
  • The paper reveals that AI disrupts specific tasks rather than whole jobs and stresses the importance of inclusive policies to mitigate the digital divide and promote balanced growth.

AI and Its Economic Potential: Reflections from Historical Technology Trends

The paper "AI and the Opportunity for Shared Prosperity: Lessons from the History of Technology and the Economy" by Guy Ben-Ishai, Jeff Dean, James Manyika, Ruth Porat, Hal Varian, and Kent Walker thoroughly investigates the potential economic impacts of AI by drawing parallels with historical technological transitions. The authors probe into whether AI can propel economic transformation and growth, and critically, what must be achieved to fully harness its potential for broad prosperity.

The essay addresses the key questions of AI's economic potential, the non-certainty of its benefits, what historical technological shifts suggest about employment, and the elements necessary for a robust AI policy framework. The fundamental thesis of the discussion emphasizes that while AI embodies an exceptional opportunity for economic advancement, realizing its benefits is contingent on a strategic and coordinated approach.

AI as a General-Purpose Technology

The paper argues that AI meets the criteria of a general-purpose technology akin to electricity or the steam engine, given its broad applicability, capacity for innovation spillovers, and intrinsic technological improvement. AI's capacity to enhance labor productivity, extend economic opportunities, and drive scientific innovation is heralded as immense. The research indicates AI has already breached diverse business functions, with empirical evidence showcasing AI's application across sectors including finance, healthcare, and supply chain management, to name a few. For instance, AI has propelled radiology into new areas, aiding tumor identification, yet spurred a surge in demand for radiologists—demonstrating its role as a complement rather than a substitute for human skills.

Economic Benefits Are Not Automatic

The authors underscore that the economic gains from AI are not guaranteed. Historical lessons reveal that technological breakthroughs can take decades before delivering widespread economic benefits. AI's successful integration into economic systems demands concerted investments in R&D and complementary innovations, an accessible and adequate AI-capable infrastructure, and a workforce adaptable to AI transitions. This includes skilling programs that prepare the workforce to complement AI tools effectively, while minimizing potential displacement impacts.

Moreover, the paper identifies obstacles in adopting AI equitably across sectors and geographies. Without addressing these barriers, notably the digital divide, AI could fortify existing economic disparities instead of fostering inclusivity.

Lessons from Technology and Employment

From a historical perspective, the paper asserts that technology generally disrupts specific tasks rather than entire occupations. This disruption ushers task automation, yet concurrently, generates demand for new tasks and jobs. Automation has historically been accompanied by a net increase in jobs, challenging the view that AI might trigger mass unemployment. By focusing on tasks rather than jobs, AI is seen as a catalyst for redefining the labor landscape without diminishing overall employment.

A Collective AI Policy Agenda

To capitalize on AI's potential, the paper advocates for a strategic policy agenda focusing on:

  • Infrastructure and Ecosystem Investments: Creating an environment conducive to innovation through legal frameworks, substantial STEM investments, and promoting cross-sector collaborations.
  • Workforce Adaptation and Complementarity: Evolving workforce skill sets that align with AI innovations and encourage complementary rather than substitutive applications of AI in workplaces.
  • Promoting Widespread AI Adoption: Facilitating organizational changes and embracing diverse AI applications tailored to various economic sectors to ensure inclusive growth.

The findings encourage a balanced, multi-stakeholder approach to policy formulation — spanning developers, users, educators, governmental bodies, and infrastructural entities.

Implications and Future Directions

This paper positions AI as a linchpin for potential economic rejuvenation, offering lessons from history while casting a spotlight on emerging challenges. Recognizing AI's transformative possibilities requires a concerted effort to foster a balanced ecosystem that encourages safe and responsible AI development while maximizing its economic dividends. The authors argue that by employing a forward-thinking strategy that learns from historical technological adoptions and anticipates future scenarios, society can navigate the complexities and reap the benefits of this technological evolution. Future inquiries will notably include empirical studies on the scope and impact of AI deployments, ensuring AI's trajectory aligns with shared prosperity objectives.

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