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AI-Paradigm and The Economic Growth


Md Tamhidul Islam


We’ve all at some point in our lives contemplated why a presumably harmless robot can’t be allowed to enter a website? Why is the treachery of CAPTCHA so important that it poses an existential question to both human beings and robots? The answer, in the broadest of terms, might be artificial intelligence.

If something created by human beings learns to carry out the elusive specialties of humankind such as reasoning, understanding, interacting, and other cognitive processes, it might as well be trying to one-up its creators. However, regardless of the many forms of such algorithms and technical infrastructure, one conclusion is indisputable. The rise of artificial intelligence will explicitly shift our knowledge of the existing economy.

AI has the sustained capacity to double the annual global economic growth rates. For instance, A study by PricewaterhouseCoopers (PwC) estimates that global GDP may increase by up to 14 % (the equivalent of US$15.7 trillion) by 2030 as a result of the accelerating development and take-up of AI. Such interpretation is the direct result of newfound data on the “Internet of things.” The linkage between the micro-lensed human life and AI is relatively simplistic and can be defined in two fine-lines.

 

Colonisation by robots vs productivity boost for humans 

Automation of routine tasks such as manufacturing line-ups or factory specialization will gain an almost guaranteed productivity spike in capital-intensive sectors. The enhanced analytical and pinpointed tech system will also improve business compliance and assistance. While this investment in software, tech infrastructure, and policy shifting will add direct revenue, it will save up a lot of time, enabling companies to focus on value-added activities and enhanced diversity. Moreover, the fundamental of sustainability in this idea is that it will never fall short of data. Increased productivity results in constant betterment of final products, which means that consumer demand is likely to see exponential increase.

Hence, the more numbers of consumers are attracted, the more data is arbitrarily produced. Proof that the revolution has started can be inferred from the linear yet consecutive increase of AI-related patents in the past 20 years. However, it is a given that by 2030, if everything goes per plan and 70% of the world’s companies adopt at least one type of AI (McKinsey Global Institute), a shock in labour markets is likely to be created due to the effect of negative externalities on the transition period. In conclusion, all these boosts come with two anticipated problems — the first one being the elastic change in the volatile job market, and the second being dominance by robots resulting in Terminator Rebirth

 

Privacy trade-off vs drastic change in markets 

Assuming that privacy is not a social construct and everybody wants their privacy to stay securely intact, we have already set foot on the path of giving away anything and everything about our lives. While you might accept cookies on websites without knowing what they mean and keep waiting for the cookie-box to arrive, your information and preferences are being sold and distributed to millions of website cloud-boxes in the meantime. Artificial intelligence only adds a more vibrant layer to the whole process by making it much more easy, convenient, and utilitarian. IoT, Cloud-computing, 5G, 3D printing, augmented reality, etc will transform the manufacturing system and turn it into a single cyber-physical chain system of data transferring.

 

It is amazing for factory optimisation and market research through boosting market competitiveness and taking the equilibrium to the best possible point. However, while the big companies will be facilitated to rise beyond reach, small tech-biz companies are likely to replace them for various generic tasks, which might result in mid-sized companies losing out in the long run. According to PwC, all sectors of the wide economic spectrum will see a 10% boost by 2030 in growth but unironically, service industries are likely to see the biggest jumps — as high as 21%.

A forecast by think-tank Bruegel warns that as many as 54% of jobs in the EU face the probability or risk of computerisation within 20 years. What this means is that surely the monumental shift might change the market and its components, but how human beings adapt to it and whether everyone can secure their perfect places is still a thin line in the cloud.

For now, all we can do is pass our CAPTCHA tests on the third try and hope that the creators don’t get kicked out of the chat-box by the new moderator.

 


Tamhid is a part-time teen economist and a full-time meme connoisseur with plenty of time at hand to discover the planet’s secrets. Reach out to him at [email protected]

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