11th July 2023 (6 Topics)
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AI’s disruptive economic impact, an India check
Context:
- Ethical debates on the use of generative AI have subsided in the realisation of worker replacements and economic growth with the rise of AI has entered the spiral that the Internet once went through.
Artificial Intelligence (AI) and Advantages:
- Increase in Productivity: AI tools boosted worker productivity by 14% and improved consumer satisfaction, leading to better treatment of customer service agents and increased employee retention.
- Increase in Global GDP: A study by PricewaterhouseCoopers (PwC) predicted an increase in global GDP by 14% or $15.7 trillion by 2030 due to on-going technological advancements in AI.
- Creative AI potential: Generative AI has potential to break down communication barriers between humans and machines could have large positive macroeconomic effects.
Economic Concerns associated:
- Rise in Number of Unskilled labour: Generative AI may not replace employees, but employees using generative AI will replace those who do not upskill.
- Impact Labours and their Wages: The decrease in labour getting jobs and wages will adverse effects primarily to blue-collar workers and individuals with lower levels of education.
- Relative wage declines: Tasks Automation and the Rise in U.S. Wage Inequality can be attributed to relative wage decline of worker groups specialised in routine tasks in industries experiencing rapid automation.
Opportunities for India:
- Can harness its demographic dividend: India should be on the lookout as any net negative effect on employment can adversely impact the economy.
- Increased efficiency: The adoption of AI in call centres and software industries does not bode well for millions of Indians who work in the field.
- Focus more on education and training in AI: As of now the online education has larger acceptance after the COVID-19 pandemic to take advantage of the demographic dividend and new opportunities that emanate from AI.
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