Starting with everyday workers who fear being replaced by machines to visionaries like Elon Musk, who once compared A.I. to “summoning the demon” in a horror film, artificial intelligence has no shortage of critics.
But according to Rob Subbaraman, chief economist for Asia ex-Japan at Nomura, in those countries that have a shortage of young workers, A.I. and other new technologies could take off. Japan, South Korea, China and Taiwan are included in that list.
“If you don’t embrace these new artificial intelligence, robotics and ways to make up for shortages of youth labor, you’re going to have a slowdown of potential growth,” he said during a television interview on Monday.
Labor, capital and productivity tend to drive a country’s growth potential. A country has to rely a lot more on productivity in order to maintain its growth in situations when there is a slowdown in a country’s labor force growth.
And since machines can process information faster and carry out tasks more quickly than humans, in such cases they came in great help.
Japan as a place where an A.I. revolution could kick off was pointed out by Subbaraman. “Because Japan’s got a falling and aging population, it really needs machines, A.I. and all this to start replacing labor,” he said.
The A.I technology could actually help the country to grow and his government does not fear the technology, Japanese Prime Minister Shinzo Abe said in March of this year. And with Japan opening up two hotel that are staffed mostly by robots earlier this year, the A.I. technology is already in place in the country.
After reporting a much-stronger-than-expected 4 percent annualized GDP growth, Japan stunned markets on Monday. Ever since the 1980s, the third largest economy of the world has been mired in low growth.
Here’s what must happen next according to Subbaraman.
Many jobs such as data entry keyers, telemarketers and hand sewers and similar jobs that are low skilled are already being automated. The rise of A.I. will create new industries and jobs, and this is the counter-argument in favor of the technology.
Adequately re-training workers so that they’ll have the necessary skills for new jobs that’ll come into being is going to be the key thing for governments, Subbaraman said.
“Governments need to be forward-looking and start acting now in terms of retraining workers, encouraging labor mobility, spending more of their fiscal budget on this,” he said. “That’s where I think they need to start moving a lot faster than they have.”
Professional services firm PwC said in a June report that noting an equivalent of an additional $15.7 trillion globally, A.I. could drive global gross domestic product (GDP) higher by 14 percent in 2030. PwC said that more than half of all economic gains from A.I. between 2016 and 2030 is expected to made up by improved labor productivity.
But according to consulting firm McKinsey, still at an experimental stage is the A.I. adoption outside the tech sector as of today. A survey of 3,000 decision-makers revealed that only 20 percent of them use any A.I.-related technology on a large scale or within a core part of their businesses, said McKinsey in a recent report.
(Adapted from CNBC)