If you want to determine the true impact the AI revolution will have on the US economy, well, you may have to wait a bit. That was, essentially, the message from experts speaking today at MIT Technology Review’s EmTech Next conference in Cambridge, Massachusetts, where they discussed the future of work and the changes—expected and as yet unknown—that artificial intelligence, robotics, and other emerging technologies will bring to the US job market.
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Robert Solow, a Nobel prize-winning economist and MIT professor, said on stage that it’s “hard to say” whether AI will bring about a kind of technological shakeup different from ones we’ve seen in the past. At the moment, it looks broadly similar, he said. But we still don’t know much about what an AI-based economy will look like, including how much companies will have to invest in things like buildings and equipment, and what kind of labor will be in demand.
“Coal mining was different from auto manufacturing, different from retailing, and an AI-based economy will be different from the others,” he said.
Lots of AI-related products and services exist purely in the digital realm. Karen Mills, administrator for the US Small Business Administration under President Barack Obama, noted that while semiconductors more or less defined the last 50 years of innovation and drove a huge amount of economic growth, they were physically manufactured goods.
“[AI is] not a physical good; it’s a service,” she said, “and one of the questions is, does that change the economy if it’s not a capital good?”
One big problem that could have lasting effects, she thinks, is a mismatch between the skills companies need in new employees and those that employees have or know they can readily acquire. To fix this, she said, companies need to start investing in their workers the way they do in their supply chains.
For now, Solow pointed out, the US economy as a whole is highly productive—the sum of all income generated in the country will be about $19 trillion this year. Yet in the decades since he began working as an economist in the 1940s, the percentage of the national income going to people that are being paid in salaries and wages has dropped from 75 percent to about 62 percent, he said. That is a big driver of inequality as wealth has concentrated among the country’s top earners.
We don’t yet know how this will change with the rise of AI. Suppose that the share of the national income that goes to workers continues to fall, though. If it does, Solow said, we’ll need to figure out a new way of distributing income.
How to do this? He’s not a fan of a universal income, where each person periodically receives a guaranteed amount of money. But he suggested a government agency akin to the Social Security Administration that could own assets such as robots and distribute income to people—though not necessarily by age, as Social Security does. He can imagine some kind of wage supplement for workers, too.
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June 11-12, 2019