Artificial Intelligence is all set to disrupt the economics of human intelligence
As the world advances in technology, many inventions and automations have been done in the past few decades which changed the way of living and made improvements in every field of life. However, 4th industrial revolution has made technological advancement in a quite different way that has not been done ever before and disrupted almost every business sector radically with a storm of technologies. Artificial Intelligence is one of the remarkable developments among those as it transforms the ways our socio-political and economic lives have been established.
Several applications of AI in our daily lives include smart home and office devices, navigation services, driverless cars, digital voice assistants, intelligent software for banks and financial services, healthcare diagnostics machines, weather forecasting, etc. AI is aiming towards economic growth that will contribute to the global GDP. As researches suggest, AI could double the annual growth rates by 2035.
This development will be done in three crucial ways — 1) labor productivity will be increased using innovative and efficient technologies 2) virtual workforce will be developed by AI that will be able to solve problems and learn on its own 3) economic benefits will be achieved via diffusion of innovation by creating innovative revenue streams. These developments and immense wealth will generate more jobs but on the other hand, it will also displace many of the existing jobs and have the potential to severely impact workers and create inequality in society.
According to the analysis done by Mckinsey Global Institute, it has been demonstrated that approximately 15% of the workers will be displaced, at least 30% of the work from 60% occupations can be automated, 3% to 14% of the workforce globally will have to switch their occupations by 2030. Nevertheless, millions of jobs will also be created due to an increase in income, developed health, and spending on education.
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Our conventional economy has a composition as that of a pyramid. At the bottom, there are many low-paid jobs available that require low-skilled workers and as we move in the upward direction there are fewer high-paid jobs with the requirement of high-skilled workers. Automation creates unemployment at the lower area of the pyramid and creates new jobs which require re-skilling and re-training of workers to deal with complex and difficult tasks. Although, there will be fewer high-tech jobs for which extremely high skilled and trained workers are required only. People that don’t have any appropriate skills and are of old age who boomed with the old industries will become unemployable.
Another labor category has also emerged with these technological advances that is called gig workers. Organization focuses on lowering the production cost and cutting the workforce as much as possible thus hiring freelancers to perform the job that will require skilled workers, making the freelance market quite competitive. The relation between organizations and these freelance workers has been ruthlessly discredited, there is no job protection and medical benefits to the workers anymore.
Economic leaders, policymakers, and governments need to put many efforts to make strategies for funded education, people training, a successful plan for creating new jobs, the sustainable transition of the workforce and providing appropriate safety nets to the displaced workers. If the current economic cycle in which the only source of income is a job for many people has not been changed, we will end up in a critical situation where many of the people don’t have income for a living. A sensible approach is required to tackle these disruption challenges.
As most of the jobs have been displaced due to the AI revolution, economists are discussing different methods to provide safety nets to the people and for societal balance. One of the concepts among those is Universal Basic Income. It is the basic amount that is provided by the government to the people of the state irrespective of their status of employment. Many of the innovators, entrepreneurs, billionaires, policymakers have supported this idea and contemplate this to relieve poverty and inspire people to become more creative. However, critics have doubts that this concept will make people dependent on the state.
Future is about collaboration between humans and technology. Crucial steps are required to be taken by government, corporations, and decision-makers to address this vital issue to make economic boom along with income equality in the society with the development in technologies.