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What the History of Technological Change Tells Us About the Likely Economic Consequences of Artificial Intelligence
- Artificial Intelligence (AI) is an emerging General Purpose Technology (GPT). That is, it is an innovation that can be used for many activities across different industries and sectors and can be expected to have a major impact on economies, including on labour markets.
- Substantial controversy surrounds AI; some technologists and AI experts are calling for strict government regulation of AI to prevent socially undesirable consequences, including mass unemployment and even machine subjugation of humans.
- The economic consequences of earlier GPTs, such as the printing press, the steam engine, the telephone, and computers, should help inform expectations about the likely effects of AI.
- Studies of earlier GPTs show that the adoption process is slow. Indeed, it can take decades for the original innovation to be improved to the point that it is commercially beneficial for use by a wide range of potential adopters. It also takes time for new uses of GPT to be identified and for complementary investments to be made so that new uses are financially and technically viable.
- GPTs profoundly improve productivity and standards of living. While some economic activities contract along with the demand for specific occupational skills, employment losses are more than offset by increased demand for new occupational skills, often in new business activities.
- The experience with AI to date suggests that it will have similar consequences to those of other GPTs.
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