Heavyweight cautions about AI expectations

Many of the innovations that led to productivity increases in manufacturing ended up playing a role in the economic downturn that began in 2008, says Nobel laureate economist Professor Joseph Stiglitz

For a long time, he said, many countries have been focusing disproportionately on innovation in the wrong areas, such as saving labour

“We have a lot of unemployment and yet firms are investing in machines to replace unskilled workers”

The focus should be not on GDP but a typical person’s median income, sustainability and distribution

As many as 25 million Americans are unemployed – and Stiglitz predicts full employment will not be reached in this decade

Erik Brynjolfson, the MIT economics professor, et alia is less gloomy: “We are optimistic about the ultimate productivity growth fuelled by AI and complementary technologies

The real issue is that it takes time to implement changes in processes, skills and organisational structures to fully harness AI’s potential as a GPT (General Purpose Technology)”

Benefits from specific applications are already being realised but broader economic effects from widespread adoption have yet to gain momentum so we await many more applications, steady improvements and the spawning of complementary innovations

And this could take years, even decades

Finally, Professor Rodney Brooks, MIT emeritus professor of robotics, says:

  • “Having the ideas about AI is easy – turning them into reality is hard – deploying them at scale is even harder
  • “Realising the benefits of AI is not automatic, nor is it fast – it will require great effort and entrepreneurship to develop the needed complements and adaptability at the individual organisational and social levels
  • “Major adjustments to business processes, capital infrastructure and job design will be needed to realise their full economic value”

 

Conclusion: The coming economic resurgence due to AI could be as big or bigger than any of the ones we saw in the past

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