Artificial Intelligence: Benefits and Stresses
The term General Purpose Technology (GPT) has been applied to a technology that becomes a platform for generating productivity gains in multiple sectors of the general economy. Prominent examples of past GPTs are the steam engine and the electric motor. Semiconductors and computers are recent examples of GPT. Artificial Intelligence (AI) has been called the most important GPT of our era. And as described in a recent report by McKinsey Global Institute, AI brings both promise and challenge.
Artificial Intelligence is the process of feeding into a computer massive amounts of data of a single domain so that the computer can make decisions within that domain. The process is referred to as “deep learning.” For example, by inputting all the possible linkages between two languages, a computer can be “taught” how to translate from one language to another. A similar process could teach a computer visual perception, speech recognition or decision making, or to drive a car. Computers learn from experience.
AI can outperform humans on routine tasks, increasing productivity and creating opportunities for innovation. Adoption of AI will make some skills and some jobs obsolete. Many existing jobs will change to integrate AI functions alongside human skills. While AI may well create more jobs than it destroys, the process of adoption will be disruptive, requiring significant retraining for existing jobs, and preparation for wholly new occupations.
Application of AI depends on obtaining large and comprehensive amounts of data. Business are applying AI to increase market share and reduce costs; in operating call centers using voice recognition; in logistics; and in preventive maintenance.
The McKinsey report warns that AI comes with significant potential downsides, not least of which is capture of market share by ever-larger businesses. Efficiencies gained mean periods of at least temporary unemployment as workers make transitions. The report challenges governments and businesses to address widening economic gaps between countries and between individuals within countries. Governments must also expose and attack misuse of AI in data privacy, social media, politics, cybersecurity and military applications.
A new Brookings Institution report, “Automation and Artificial Intelligence,” draws on McKinsey in concluding that “automation will bring neither apocalypse nor utopia;” there will be benefits and stresses. The general consensus of these reports is that “rough times are ahead in the labor market that will cause very real dislocations for many workers even if the total number of jobs holds steady.”