The Economic Implications of Artificial Intelligence
Artificial intelligence (AI) is a technology which has the potential to generate significant productivity gains that still go largely undetected at macroeconomic level, due to firms’ limited adoption of AI. Its impact on employment is more uncertain, although it could affect high-skill jobs to a greater extent than in the previous technological revolutions. Education, training and competition policy will play an essential role in helping everyone to reap the benefits of AI.
Artificial intelligence (AI) refers to a set of techniques which enables machines to simulate human intelligence. Its development is a technological revolution which, much like with previous revolutions of this kind, could generate profound economic changes. While research to quantify the impact of AI is still in the exploratory stage, such work provides some preliminary insights.
On a macroeconomic level, it is too early to empirically discern an impact on growth, but some initial microeconomic studies suggest that certain specific applications of AI have a significant positive impact on individual worker productivity. In a given job, these gains benefit the least productive workers the most, allowing them to catch up to their most productive peers. However, the impact of AI on business productivity has been found to be modest for the time being. This may be due to companies’ still limited and uneven adoption of AI, although there is more widespread adoption among large companies and digital firms.
The theoretical impact of AI on employment is uncertain. In the short term, this impact will depend on the speed at which AI is deployed, the shift of certain occupations towards AI-complementary tasks and the reallocation of labour towards occupations in growing demand. Furthermore, initial empirical estimates indicate that the tasks and occupations impacted by AI will not be the same as those affected by previous technological revolutions. Skilled occupations are expected to be more impacted by AI due to its ability to perform abstract, non-routine tasks, whereas the previous waves of automation and computerisation had impacted unskilled occupations and mid-level occupations, respectively.
These various findings point to the need to strengthen science curricula in primary and secondary education and AI curricula in higher education, to focus on continuing training for occupations affected by AI and to remove certain barriers to the diffusion of artificial intelligence, particularly by adapting competition policy to its particular qualities.