How Will AI and Automation Change the Global Economy?

The Future of AI and Automation

Artificial intelligence (AI) and the automation it enables will significantly disrupt the global economy. Some people fear robots will replace most of the jobs employees perform. Due to the ways automation can cut down or eliminate humans’ involvement in repetitive tasks, will these technologies permanently change how employees work?

Analysts Say AI Will Boost the World’s Economy by Trillions of Dollars

It’s not hard to see how AI could help the global economy, concerning the new, high-tech jobs it creates for skilled humans and the technologies it offers that increase efficiency. According to a report from PwC, AI could add up to 15.7 trillion dollars to the worldwide economy by 2030.

That investigation also describes what will cause the gains. It says $6.6 trillion will come from increased productivity. The remaining majority will occur due to the ways consumers around the world can get higher-quality and increasingly personalized goods.

Automation Could Worsen Global Income Inequality

The Future of AI and Automation

Most people in developed countries are aware of pervasive income inequality around the globe, even if it pops into their minds when they buy discount clothing and realize someone in a third-world nation likely spent hours making it and only earned pennies.

Experts who’ve looked into the automation and its role in continued income inequality say people in developing countries are at a higher risk of having their jobs threatened by automation than those in places like the United States and the United Kingdom.

For example, their research indicates automation technologies could perform 85 percent of the jobs in Ethiopia by 2030. In contrast, some estimates say that’s true for only 35 percent of U.S. jobs.

Others believe the effect may be even less in the United States. Content from McKinsey featuring transcribed interviews from New York’s Digital Future of Work Summit reveals a generally positive outlook about automation’s effect on jobs.

Susan Lund, one of the summit’s organizers, brought up how only five percent of jobs can be entirely automated. She believes automation will affect all employees, but flexibility will be advantageous during that shift.

Altering the Work People Do

Researchers know productivity should rise as a result of AI and automation. When those technologies become well-utilized, they could aid in faster data processing with fewer errors. Intelligent document capture platforms analyze forms and pull information from them, saving humans from data entry work and increasing companies’ returns on investments.

However, emerging technologies don’t typically take people completely out of the equation. Instead, there are increasing incidences of humans working alongside automated machines and other kinds of AI technologies.

Perhaps automation could eliminate repetitive strain injuries that often lead to days away from work. Data collected in 2016 from the U.S. Bureau of Labor Statistics found that overexertion was a leading cause of injuries and illnesses that forced employees to take time off from multiple roles, including those in office support and repair and maintenance positions.

Statistics from Gartner mention that AI will create more jobs than it takes away, leading to millions of new opportunities for individuals ready to diversify their skills. Soon, we could see that AI is impacting the global economy by giving people chances to get involved with jobs that are less physically or mentally intensive and more meaningful.

Also, a 2016 study found 39 percent of manufacturers planned to “definitely” devote a significant amount of research and development funding to robotics over the following 12-24 months, while 30 percent said the same about artificial intelligence. Those entities recognize technology as fuel for growth. Agile employees have an increased likelihood of finding work during this technological evolution compared to those who don’t adapt to changes.

AI’s Potential Impact on Education

Ludger Wössmann, a professor of economics at the University of Munich, authored an in-depth paper asserting how empirical research proves education is a significant driver of economic growth. He also believes student achievement is a primary factor instead of the period a person attended classes.

People have weighed in with opinions about how AI could impact education. It could help more people to attend classes and ensure that the educations they get are among the best available.

Automated systems might speed up the grading process, giving teachers more time for face-to-face interactions with students. Furthermore, AI could open up affordable possibilities for people to learn outside of traditional classrooms and use customized curriculums. If so, education should become more accessible and help economies thrive, even in nations that previously viewed learning as a luxury — provided the technology is available there.

AI and automation will undoubtedly cause notable changes in the world’s economies, and research indicates that many will be positive.

Workers who are prepared for what’s ahead and willing to keep open minds about new ways of earning their livings should be in optimal positions for beneficial outcomes rather than getting left behind.

By Kayla Matthews

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