World Economy

AI Will Create Jobs, Spur Global Growth

Eighty percent of leaders surveyed by Tata said that AI could facilitate team composition, organization, and communication, and 93% believe it will enhance employee engagement
China’s Sunway TaihuLight supercomputer is the world’s fastest.China’s Sunway TaihuLight supercomputer is the world’s fastest.

The inevitable march toward automation continues, analysts from the McKinsey Global Institute and Tata Communications wrote in separate reports this week.

Artificial intelligence’s growth comes as no surprise—a survey from Narrative Science and the National Business Research Institute conducted earlier this year found that 61% of businesses implemented AI in 2017, up from 38% in 2016—but this week’s findings lay out in detail the likely socioeconomic impact in the coming decade, Venturebeat reported.

The McKinsey models predict that 70% of companies will adopt at least one form of AI—whether computer vision, natural language, virtual assistants, robotic process automation, or advanced machine learning—by 2020.

And Tata found unbridled enthusiasm among business leaders for an AI-dominated future; in a survey of 120 of them, 90% said they expect AI to enhance decision-making.

McKinsey and Tata both contend that’s a good thing. McKinsey forecasts that AI could contribute an additional 1.2% to gross domestic product growth for the next 10 years, and that it could furthermore help to capture an additional 20-25% in net economic benefits (equating to $13 trillion globally) in the next 12 years.

Tata’s report, meanwhile, says that those gains won’t come at the expense of jobs, but rather will “create new ways of working”, and “new jobs” in companies. (That jibes with a report from Gartner in December 2017, which predicts that AI will create 2.3 million jobs in 2020.)

  No Smooth Sailing

“Robots and AI are not going to take away this creative, insightful, empathetic aspect of almost every job,” Ken Goldberg, a leading AI researcher and UC Berkeley professor who coauthored the Tata study, wrote.

That’s not to suggest it’ll be smooth sailing. McKinsey lays out the considerable challenges yet to be overcome, which include the human capital required to label training data; the dearth of labeled data; a lack of transparency in AI systems; difficulties in generalizing machine learning models; and the risk of bias. That’s to say nothing of AI’s public perception problem.

“Policymakers will need to show bold leadership to overcome understandable discomfort among citizens about the perceived threat to their jobs as automation takes hold,” the authors of the McKinsey report wrote, “and companies will need to be important actors in searching for solutions on the mammoth task of skilling and re-skilling people to work with AI.”

And not everyone will share equally in the forthcoming wealth and prosperity.

McKinsey said the portion of jobs that call for “low digital skills” may fall to 30% in 2030 from the current 40%, as jobs that require higher skills increase to 50% from 40%. And “leading countries” like the US and China, it notes—which accounted for 66% and 17% of investments in AI in 2016, respectively—will benefit more than others.

But that hasn’t dampened the C-Suite’s excitement for AI. Eighty percent of leaders surveyed by Tata said that AI could facilitate team “composition”, “organization” and “communication”, and 93% believe it will enhance employee engagement by helping managers better assess skills and suggest activities that can spark creative thinking.

“The prevalent narrative around AI has focused on a ‘singularity’ — a hypothetical time when artificial intelligence will surpass humans,” Goldberg wrote for Tata. “But there is a growing interest in ‘multiplicity’, where AI helps groups of machines and humans collaborate to innovate and solve problems. This survey … reveals that multiplicity, the positive and inclusive vision of AI, is gaining traction.”

  China Will Catch Up

The McKinsey report pointed out that without AI, China will face huge challenges in achieving its target growth rates in the future. China needs AI because its labor productivity today is below the global average.

The McKinsey report expects AI technologies to have a significant impact on sales and marketing within China. This, in turn, might boost consumer spending, which is the goal of China’s current effort to transition to a consumer-led economy from an export-driven one.

AI is a big thing among venture capitalists in China. Taiwan-born Kai-Fu Lee, arguably China’s leading venture capitalist in artificial intelligence, claims China is now ahead of the United States in certain AI fields and might soon even dominate this key future technology.

China is catching up really fast, said Lee, who also noted that China’s “magical ascent” in AI has taken only two years. He noted China came way behind, but China is now actually ahead of the US in AI implementation.

The McKinsey report explained that AI will likely impact an economy through multiple channels. Among these channels are creating wealth; substituting human labor; increasing the number of available products and services and boosting global data flows.

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