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Artificial Intelligence, or AI, continues to puzzle. The concept has not yet been widely adopted, but forecasts about its disruptive potential have already ranged from the utopian to the apocalyptic. Multiple studies forecast the technological takeover of a number of occupational groups, but the impact seems to vary significantly across industries and might take a long time to arrive.
AI is now growing rapidly and has massive potential to reshuffle most aspects of our lives. In addition to delivering substantial improvements across a number of industries, inlcuding healthcare and agriculture, it also promises to cause significant and lasting worldwide economic disruption.
The Race
The McKinsey Global Institute estimates that AI could add around 16 percent, or $13 trillion, to global output by 2030. The immense potential of AI will ultimately push nations and regions to compete for dominance in this field.
Significant investment into the early stages of AI development promises to deliver significant returns in the medium-term. Therefore, more nations are entering into the unofficial race to master the technology and capitalize on its potential.
China and the United States are the major players so far, having invested hundreds of billions of dollars in R&D, and they will likely retain the flagman status for the rest of the century.
According to Forbes, Asia is the region that is set to experience the largest disruption from AI deployment. Average annual spending on R&D here already surpasses 2 percent of GDP.
From South Korea to Singapore, AI research clusters and startups are rapidly emerging. For instance, South Korea secures some of the highest numbers of AI patent filings, according to the World Intellectual Property Organization. Beijing leads in global annual R&D spending by allocating more than 2 percent of GDP, or around $275 billion, and Japan follows with roughly $176 billion. Furthermore, the nations of the region place a distinctive emphasis on scaling applications in industrial and home robotics, smart city projects and more. This could potentially establish them as the leading global hubs and secure their long-term competitive advantage.
The United States also places a high premium on AI. Although domestic spending is roughly $131 billion and lags behind that of China, the United States has a massive private sector and countless numbers of startups that still attract the best and brightest from all over the world. In addition, the distinctive local entrepreneurial culture and adherence to the open-innovations development framework further set the United States apart in its potential to become a long-term leader in AI.
It is important to keep in mind that the impact of AI will be different within each given country, and largely commensurate with the rate of urbanization. Multiple studies reveal that smaller, more rural communities are significantly less exposed to technological disruption than larger and more dense urban ones. In effect, AI could further exacerbate current divides between developed and developing economies, and once again redraw the transnational supply chains routes.
Workforce Disruption
A report by the Brookings Institution underscored surprising findings about AI. In contrast to popular fears that the tool will ravage blue-collar workers, it is the educated and professional white-collar class that is likely to experience the most significant impact from AI. Thus, workers with graduate or professional degrees will be almost four times as exposed as those with just a high school degree. In effect, engineers, scientists, analysts and businessmen aretogether projected to bear the brunt of the AI disruption. Some, however, will be forced to transform more than others.
According to the study, the agriculture industry will experience the highest median exposure. Another group includes tech-heavy occupations such as engineering, science and computer technology. In contrast, education, food service, personal care and traditional face-to-face service industries will likely be shielded from significant disruption and will continue to operate in much the same way as before.
Tech Skills and Ethics
The impact of AI will not erase the occupational groups mentioned above, but rather change their habitual workplace patterns. More work will be done in a hybrid format that will require enhanced human-machine coordination, while AI and its applications will become more sophisticated and ubiquitous.
These occupational trends will ultimately drive up demand for employees with tech skills. Today we are already treating “general purpose technologies” as an essential part of the workforce, but are still largely in self-denial mode regarding the actual scale of disruption. The distinctive feature of AI is that it will leave most occupational groups will little choice but to adapt to the new reality.
The spread of AI will also require a careful approach to ethical concerns. The tremendous power of the tool means it should be exclusively used to serve human needs. First and foremost, the technology has to be trusted, and that should be the only way to allow its disruptive march across the world.
“This is a moment of choice and opportunity. It could be the best 10 years ahead of us that we have ever had in human history or one of the worst, because we have more power than we have ever had before,” says Erik Brynjolfsson, director of the MIT Initiative on the Digital Economy.
In January 2020, the White House proposed 10 AI regulatory principles to control the application and development of AI across the private sector. In the past, similar principles were applied across the EU. The core of the regulatory measures relies on the inherent assumption that if the public believes the risks of AI outweigh the benefits, then they are less likely to use these applications themselves.
Hopefully, ethical norms of this kind will ultimately facilitate the emergence of an AI charter that could be accepted universally, allowing us to avoid the sci-fi like apocalypric scenarios put forwarded by the critics of AI.
