How is AI (Artificial Intelligence) Affecting the World in the Perspective of the Economy

          Nowadays, most countries including South Korea, the United States, Japan, and China are focusing on the growth of the 4th industrial revolution. There is especially one of the most important keywords about the 4th industrial revolution: Artificial Intelligence. Starting with British Mathematician Alan Turing in the 1950s, Artificial Intelligence has never stopped developing. AI was first shown to society as a thinking computer and now can self-learn. Not only its ability to develop knowledge of the world, AI is also estimated to show big growth in the economic field of the world. How is AI economically affecting the world?

Economists generally agree with the idea that Artificial Intelligence will have a positive impact on economic growth. According to NBER, it is claimed that AI will play a role of a general-purpose technology that will enable many subsequent innovations that can lead to improved productivity in the 21st century. Increased productivity with high quality would lead to the growth of the economy when using AI. However, the statistics are quite different than what the community has expected. According to the US Bureau of labor statistics, starting from 1994 to 2018, the growth of productivity has been unevenly affected by digital technology which includes Artificial Intelligence. Since the growth is uneven and also decreasing at some part, the economical growth based on productivity would also be unstable. Uneven rate of productivity informs society that other factors are affecting the amount of labor more than digital technology does. Therefore, we cannot necessarily see that AI has been effective for the productivity that has a high contribution to the growth of the economy.

The biggest change that will happen when Artificial Intelligence is publicized is the rearrangement of jobs. Many people are concerned about job loss because AI can take people’s simple jobs. This happens because as the jobs turn automatic with the growth of AI, the actual human labor rate decreases. Companies will no longer have to use people since AI labor requires less money than human labor originally did. Then, people will lose their jobs which will lead to economic depression at a high rate.

          However, Artificial Intelligence is anticipated to be used for complementary means, not the whole change. Thus, according to Goldman Sachs, about two-thirds of all occupations in the United States could benefit from AI, with estimates ranging from 25 to 50 percent of tasks in those industries that could be automated by AI. Global productivity is expected to grow by 1.4 percentage points per year and the global economy by 7 percent by the standard of GDP per year over the next decade as AI is increasingly used to automate simple tasks and redeploy existing workers. 

People just started to gain knowledge about Artificial Intelligence, which means that things that we now know are not the only thing. Rather than fearing the expansion of AI technology and its usage, control and management of the development will help our society take advantage of the technology.