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Joaquim Cardoso MSc
Founder and Chief Researcher, Editor & Strategist
March 22, 2024
What is the message?
Artificial intelligence (AI) is poised to revolutionize the economy, yet the magnitude and speed of its impact remain uncertain.
While AI holds promise for boosting productivity, it also presents challenges, particularly for workers whose skills may be devalued.
This summary is based on the article “AI may change everything, but probably not too quickly”, published by The Deccan Herald on March 31, 2o23.
What are the key points?
AI’s economic impact hinges on technological advancement, government policies, and workforce adaptability.
Historical parallels, such as the introduction of electric motors, suggest that realizing AI’s full potential may take time.
Despite predictions, the economic benefits of previous technological leaps, like computing, took longer than expected to materialize.
The initial productivity boom from information technology in the 1990s was short-lived and not significantly higher than previous periods without revolutionary technology.
AI’s transformative effects may unfold gradually over the next decade, resembling past technological revolutions rather than immediate disruptions.
What are the key statistics?
Moore’s Law accurately predicted the doubling of transistors on computer chips every two years, driving technological advancement for decades.
The economic payoff from information technology took decades to materialize, similar to the lag in benefits from electrification.
Productivity growth during the IT boom of the 1990s was not substantially higher than in previous periods without groundbreaking technology.
What are the key examples?
The transition from steam-powered to electric factories highlights the time required to fully utilize new technologies for economic gain.
The economic boom after World War II was not solely driven by new technology but by the widespread adoption and adaptation of existing technologies.
The comparison of previous technological revolutions underscores the uncertainty surrounding AI’s economic impact and the caution needed in predicting rapid growth.
Conclusion
While AI holds the potential for significant economic transformation, history suggests that realizing its full benefits will likely take time.
Predictions about rapid economic growth driven by AI should be approached with skepticism, with the true impact expected to unfold gradually over the next decade rather than in the immediate future.
To read the original publication, click here.
