Recently, artificial intelligence has become a hot topic again. Many people are curious about how the future of AI will affect the economy, population, and innovation. Today, I would like to share with you some personal views on the impact of artificial intelligence on the economy and all walks of life.
Since the advent of deep neural networks, artificial intelligence has developed faster than you can imagine. The advent of ChatGPT was a miracle that exceeded the expectations of almost all computer scientists. A simple neural network model, once it has tens of billions of connections, and through a lot of machine learning, can produce general intelligence similar to that of the human brain. Although today's artificial intelligence technology has yet to be perfected, in a philosophical sense, it has basically been proved that there is nothing special about the human brain. Humans simulate all human intelligence through machines, but it is only a matter of time. The question of the future is not what artificial intelligence can do, but what humans will choose to let artificial intelligence do.
From an economic point of view, a more pressing question is which occupations will AI replace, and will there be a lot of unemployment? Which industries will be positively or negatively affected? How will AI affect innovation and education? How will AI affect income distribution?
Before answering these questions, let's look at an industry quadrant chart. We divide some representative industries into two dimensions, four quadrants. The abscissa is the degree of technological automation of the industry, from "easy to automate" on the left to "difficult to automate" on the right. Industries that are easier to automate include agriculture, appliances, clothing, automotive, and digital entertainment. Industries that are "difficult to automate" include real estate, as construction workers and decorators are difficult to replace with robots in the short term. Tourism is also more difficult to automate because it involves the transportation and services of people. Ordinate is the dimension of the hierarchy of needs, from low "material needs" to high "spiritual needs". People's material needs include "food, clothing, housing" and other industries, material needs will be relatively saturated after a certain amount, while spiritual needs are almost endless. Tourism, entertainment and education belong to spiritual needs, and innovation satisfies the instinct of human exploration, so it is also a spiritual need.
Using the above two dimensions, all walks of life can be divided into four quadrants:
Material demand industries that are easy to automate, such as agriculture, clothing, automobiles and other consumer goods manufacturing, because of the efficiency of robots and artificial intelligence these industries have greatly improved, the cost and price have dropped significantly, but the demand will not increase because of the price decline. Because material needs will be saturated, a person can only eat so much and wear so much. So both the share of gross output and GDP will fall.
The digital entertainment industry can greatly improve efficiency, because artificial intelligence can already generate dialogue, drawing, video, etc. With the improvement of efficiency and the decline of prices, people will consume more digital entertainment products, because this is a spiritual demand, so there is still a lot of room for improvement. The output value and GDP proportion of the industry will be relatively stable.
Material demand industries that are difficult to automate, such as real estate. Since construction workers and decoration workers are difficult to replace in the short term, the overall cost of real estate is stable, the demand is also stable, and the proportion of total output value and GDP will tend to be stable.
Finally, there is the spiritual demand industry that is difficult to automate. Travel can be "difficult to automate", so efficiency and prices remain stable. However, demand will increase with the prosperity of the society as a whole, so its share in the economy will increase. In clothing, food, housing and transportation, it is difficult to automate living and travel, and only travel (tourism) is a spiritual demand that is difficult to automate, and its proportion will be higher and higher. In addition, there are two industries with spiritual needs that will become increasingly important: innovation and education.
Innovative industries
Innovation is not a single industry, but distributed in R&D and creative activities in all walks of life, and its impact on artificial intelligence can also be analyzed using the above framework. Some innovative work can be partially replaced by artificial intelligence, such as artificial intelligence that can help humans find and test solutions to problems (like AlphaFold), or even automatically recommend and analyze some hypotheses, and can also assist in making some art. But in general, humans still dominate in asking questions and needs, because what exactly is needed, it is fundamentally necessary to ask humans themselves. The choice of solutions to some problems involves unique human values and ethical judgments. In addition, from a security point of view, humans will not completely hand over innovation to artificial intelligence. Therefore, humans will continue to grasp the steering wheel and final decision-making power of innovation, and complete innovation with the help of artificial intelligence.
At the same time, innovation brings satisfaction with a sense of accomplishment and curiosity, as well as fun based on the process of exploration. Moreover, artificial intelligence replaces some simple, repetitive tasks, making innovative work more interesting. So innovation will become a very advanced spiritual demand, which will attract more people to do this work. The conclusion is that AI will improve the overall efficiency of innovation and reduce the cost of innovation, but the scale of innovation activities will continue to increase, and the economic proportion and importance of innovation industries will also increase.
Education industry
We still use this analytical framework. First, education can be partially automated, and artificial intelligence can help or even replace some teachers' work. In addition, some mechanical skills do not have to be learned so carefully (such as grammar and arithmetic). Of course, the current rigid admission system will delay the application of artificial intelligence in the field of education.
In the future, more people will be engaged in innovation, and innovative people need to master and use the powerful tool of artificial intelligence, which requires innovators to have higher cognitive capabilities. Some bosses believe that ChatGPT is equivalent to hiring countless undergraduates almost for free. Many jobs, artificial intelligence capabilities have exceeded undergraduates, does this mean that everyone does not have to go to college undergraduates? On the contrary, more people need to receive undergraduate education in the future. Because only through undergraduate studies can you have the higher cognitive abilities necessary to harness artificial intelligence, and then you have the opportunity to enter master's and doctoral studies and become innovators in the intelligent era.
In addition, education will increasingly become a spiritual need. The education of the future is certainly not only about developing the basic skills for a simple job (which is likely to be replaced by machines in a generation), nor just about the cognitive ability to innovate, but also about cultivating humanistic qualities, life skills, and the joy of life. Such advanced demand will increase with the overall income level.
Therefore, education should be an industry where efficiency will increase but demand will also increase, and it should be more popular and accelerated. That's why I've been suggesting that high school and university education should be universalized, as well as the abolition of high school entrance examinations and the downplay of college entrance examinations (see:
"Ten Fertility Burden Reduction Policy Recommendations"
）。
Population and innovation
Let's take a look at how AI will affect the population. One way of saying is that with artificial intelligence, we don't need this large number of people. I just mentioned that AI will not lead to an overall spike in unemployment, but more people will turn to industries with spiritual needs, especially innovative industries. Therefore, the biggest negative effect of population decline is not the pension problem but the inhibition of innovation. China's annual new birth population has fallen off a cliff in recent years, and the shrinkage of the young population in the future will weaken the scale effect of innovative talents. This scale effect is especially important in the field of artificial intelligence, because artificial intelligence requires a large amount of user-generated data for training, and a large number of consumer groups are a very important innovation element in the era of artificial intelligence. In the future, the economic proportion of innovative industries will become higher and higher, and the decline of the new population will seriously affect China's scientific and technological level and comprehensive national strength in a generation.
Also, Is having children a spiritual need? Can it be automated? Obviously part of it involves spiritual needs, as children can bring a unique sense of accomplishment and affection. But there are also high costs of having children, according to a study by the Yuwa population (see:
China Fertility Cost Report 2022
The average cost of direct parenting for each child in China before the age of 18 is about 500,000 yuan (the direct parenting cost in large cities such as Shanghai and Beijing is close to 1 million yuan), and the time spent by Chinese parents on education is also very high. In the short term, it is difficult for artificial intelligence to significantly reduce the cost of parenting, so it is still up to the government to take measures to reduce the burden of fertility and education reform. If the burden of parenting can be greatly reduced, then having children as an instinctive human need will still be fully released, so I have always called for the introduction of policies to reduce the burden of childbirth as soon as possible.
Unemployment and leisure time
The biggest concern about AI is unemployment, and through the above analysis, I have already given the answer - as efficiency increases, some industries will shrink, but others will expand significantly, and the latter will be difficult to automate and able to meet spiritual needs, including education, innovation and tourism. So the composition of employment throughout the economy will change, and it will not cause a lot of unemployment. Of course, some people will face skill upgrades and career changes. On the whole, the material and spiritual level of the economy will be richer, especially the spiritual needs will be more satisfied.
Efficiency gains will lead to economic growth, but the increase will be partially offset by fewer working hours. How much do people work less as incomes rise? It depends on whether the job is "good" work that is fulfilling and interesting. Obviously, innovation is such a job, such as a R&D person who still works diligently based on interest. As income levels rise overall, more and more people are no longer willing to work in long, simple and boring jobs.
Allocation and meaning issues
The distribution problem can be viewed in terms of three different types of work. One is high-skilled jobs involving innovation and complex brain power; the second is the medium-skill work of simple mental power; The third is low-skilled jobs such as waiters and couriers. Because medium-skilled jobs will be replaced by artificial intelligence, their incomes will converge with low-skilled jobs. With the widespread application of artificial intelligence, the ability requirements of enterprises for high-skilled people will increase, and correspondingly, the income of these people will also rise relatively.
conclusion
AI will have a profound impact on all aspects of the economy. As the overall efficiency of the economy improves, people will have more time for leisure and recreation, but there will be no overall mass unemployment. Industries that are difficult to automate and able to meet spiritual needs will continue to grow and create jobs. As an industry involving spiritual needs, innovation will create more jobs, and its importance in national strength competition will continue to increase, which in turn puts forward higher requirements for education. At the same time, the negative effect on innovation caused by the shrinking population caused by the low fertility rate will become more prominent, so China needs to introduce effective policies to reduce the burden of fertility and education reform.