It remains to be seen whether the massive investments now taking place in artificial intelligence (AI) will pay off for the companies concerned, yet there is little doubt that AI is here to stay and is likely to have a substantial impact on the economy.
Like earlier game-changing technologies, from the spinning jenny, to electricity, to the personal computer, AI is likely to open up new horizons and make some existing jobs redundant; there will be winners and losers.
For some jobs, AI will make existing roles more productive, enhancing the value of individuals’ output to society. In other cases, AI will replace tasks now done by humans with machine operations. The key question is whether those who are displaced can find other work.
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Businesses will deploy AI where it brings cost savings. These may translate into lower prices and benefit consumers. AI is likely to enhance the amount that economies produce with the same inputs of people and capital, increasing productivity. That should translate into increased living standards but, along the way, the benefits may be unevenly distributed, and the problems for individuals who have to change jobs could be significant.
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We have seen in the past how major technological advances have upended economies, with substantial costs for those who could not transition to the new way of doing things. With the Industrial Revolution, the costs and benefits played out over a long time scale.
By contrast, the computerisation of our economies has proceeded relatively smoothly, with significant benefits for most people. When typist jobs disappeared, it didn’t result in major unemployment. Today’s office workers generally have more challenging and interesting roles.
Recent research by Irish Government economists, presented to the Statistical and Social Inquiry Society last month, considers the likely impact for Ireland, by examining which occupations are exposed to AI. The researchers assessed which existing jobs may become more productive via AI, and which jobs may be at risk of disappearing.
Using this analysis, the authors find that more than half of the sectors of the Irish economy are likely to be affected by the adoption of AI techniques, with roughly half of these areas likely to see enhanced productivity, possibly leading to higher employment. A little under half of the economy would not be directly impacted.
For example, the legal professions and project managers are likely beneficiaries, with AI allowing them to increase productivity. On the other hand, if coding is done by machines, employment as programmers and other IT roles may fall. There may be fewer jobs for lab technicians and radiologists, with tests and scans being done more reliably by AI. Many hands-on jobs in personal care, or as chefs, firefighters, plasterers or sports men and women, would be relatively unaffected.
In contrast to some previous revolutions in the labour market, AI is more likely to affect those with higher levels of education and higher incomes. More women than men work in affected occupations, and younger workers are also more likely to be impacted. However, many of those affected will not lose out, as AI may enable them be more productive and do more interesting work.
An important context is how graduate employment has dominated labour market growth over the last decade and a half. In the EU over that period, a net increase of 16 million at work was composed of an extra 24 million graduate jobs, with eight million fewer jobs for people with lower qualifications. Even during the recession that followed the financial crash of 2008, graduate jobs in Ireland grew every year.
So if some graduates lose their jobs through AI, rising demand for graduate workers will probably absorb those who wish to change roles, particularly people with flexible, transferable skills.
Our education system needs to foster that flexibility and adaptability, and prepare people for a world permeated by AI. Skills such as critical thinking and teamwork will be vital. Those who hope to coast to a degree via essays written by ChatGPT will probably find it much tougher to thrive in the coming job market. Most importantly, we will need people with the critical faculties to oversee the output of machine learning that has been trained on the internet’s mix of fact, fiction and fake news.
Overall, technology change has proved a major engine of economic growth over the last 200 years. Like other new technologies, AI is something Ireland needs to prepare for, and embrace. Small businesses may need guidance about adoption of AI. A thoughtful AI strategy, not a Luddite approach, is what’s called for.
