The next few years will see productivity boom and the use of artificial intelligence swell, but this might lead to “deep social implications” if companies are not careful, said Capital Group economist Jared Franz.
Speaking at the Netwealth US Study Tour yesterday held at the New York Stock Exchange, Mr Franz said the use of artificial intelligence by companies has yet to reach its full potential, as the application is more difficult than most imagine.
“The application of AI is hard. You can automate one task really well, then you get excited and you want to automate everything,” he said. “But it turns out the data isn’t always there. They’re going task by task by task. The speed is not as fast.”
But this pace is expected to accelerate. Mr Franz says data shows that productivity at companies typically increases when the economy enters a recession and workers are let go. This is likely to see more companies implement AI to replace the loss.
If companies are not careful, however, the quick take-up of AI could lead to social implications in the form of inequality in the workforce.
“You could be disrupting workers that are middle class. Inequality could be structurally elevated,” Mr Franz said.
“The economist in me says, ‘Of course. If you get disrupted, you will re-train and get a better job’. But history shows only a few people retrain … If we don’t start putting attention to it, it will have deep social implications.”
The types of jobs expected to be taken over by AI are those with routine, high-frequency tasks, such as a teacher grading essays. Mr Franz said the difference between this era’s advancements compared with past eras – such as the industrial revolution – is in the pace at which change is occurring.
“What machine learning is good at are a couple of things. It’s good at finding patterns. It will find a pattern and faster than you will. It’s also good at making predictions based on those patterns,” Mr Franz said.
“We’ve seen technological change before. It’s nothing new. We got through that pretty well. What really worries folks is that the timeframe is more compact this time. What we did in 150 years, we might be doing in 10, 15 years.”
Nevertheless, Mr Franz is optimistic about what the future of AI holds.
“I think AI is going to make us better humans generally. It’s going to allow us to do things that we really want to do,” he says.