MIT professor hoses down predictions AI will put a rocket under the economy
- Reference: 1716967694
- News link: https://www.theregister.co.uk/2024/05/29/ai_gdp_inequality/
- Source link:
In a National Bureau of Economic Research [1]paper titled "The Simple Macroeconomics of AI," Daron Acemoglu, professor of economics at Massachusetts Institute of Technology, argues that predictions AI will improve productivity and [2]boost wages in a " [3]blue-collar bonanza " are overly optimistic.
"AI will have implications for the macroeconomy, productivity, wages and inequality, but all of them are very hard to predict," Acemoglu argues. "This has not stopped a series of forecasts over the last year, often centering on the productivity gains that AI will trigger."
[4]
One rosy forecast predicts the advent of AI will see [5]100 percent GDP growth over the next decade, and a more modest [6]forecast from Goldman Sachs of "seven percent (or almost $7 trillion) increase in global GDP and lift productivity growth by 1.5 percentage points over a ten-year period." Similar optimism was evident in last year's McKinsey Global Institute [7]report , which suggested AI and other automation tech could increase annual average GDP growth by 0.5 to 3.4 percentage points in advanced economies over the next decade.
[8]
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Acemoglu is skeptical, noting that prior introductions of automation through robotics benefited business owners and managers while workers experienced more negative outcomes.
Based on [10]research last year that estimated about 20 percent of US workers could have half of their jobs done by an LLM, Acemoglu estimates that AI can save 27 percent in labor costs, or 14.4 percent in overall costs.
[11]OpenAI sets up safety group in wake of high-profile exits
[12]Microsoft's Recall preview doesn't need a Copilot+ PC to run
[13]By 2030, software developers will be using AI to cut their workload 'in half'
[14]Read AI about it... OpenAI does deal with News Corp
But those figures don't necessarily do much for productivity.
"This calculation implies that total factor productivity (TFP) effects within the next ten years should be no more than 0.66 percent in total – or approximately a 0.064 percent increase in TFP growth annually," Acemoglu reasons.
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The professor therefore anticipates AI will boost GDP growth by only 0.93 percent to 1.16 percent over the next decade.
But even that figure may be too optimistic, he argues, because productivity estimates come from automating "easy tasks" – future tasks may be more complicated and less amenable to automation. He therefore contends there will be a more modest increase in TFP and GDP in the next ten years – on the order of 0.53 percent and 0.90 percent, respectively.
And some of that GDP growth may not improve overall economic welfare if the investment in AI brings with it extra costs, like higher energy consumption requirements.
[16]
Acemoglu goes on to argue that AI is unlikely to significantly improve wages and that even if the technology improves the productivity of low-end and middle-performing workers, it may not reduce inequality.
"I estimate that AI will not reduce inequality and is likely to have a negative effect on the real earnings of low-education women (especially white, native-born low-education women)," he asserts in his paper. His findings also suggest that "AI will further expand the gap between capital and labor income as a whole." ®
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[1] https://www.nber.org/papers/w32487
[2] https://www.theregister.com/2024/02/14/ai_wont_take_our_jobs/
[3] https://www.economist.com/leaders/2023/11/30/a-new-age-of-the-worker-will-overturn-conventional-thinking
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zlb8yDUIzb-PPchRtKhNqwAAAMU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://www.nber.org/papers/w32255
[6] https://www.goldmansachs.com/intelligence/pages/generative-ai-could-raise-global-gdp-by-7-percent.html
[7] https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-economic-potential-of-generative-ai-the-next-productivity-frontier#introduction
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zlb8yDUIzb-PPchRtKhNqwAAAMU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zlb8yDUIzb-PPchRtKhNqwAAAMU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://arxiv.org/abs/2303.10130
[11] https://www.theregister.com/2024/05/28/openai_establishes_new_safety_group/
[12] https://www.theregister.com/2024/05/28/microsofts_recall_preview_on_non_ai_pc/
[13] https://www.theregister.com/2024/05/28/software_development_2030/
[14] https://www.theregister.com/2024/05/23/openai_news_corp/
[15] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zlb8yDUIzb-PPchRtKhNqwAAAMU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zlb8yDUIzb-PPchRtKhNqwAAAMU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[17] https://whitepapers.theregister.com/
Re: Doom and Gloom is a Trait and Treat of a Depressive
Depends if that opinion is that the "Emperor has no clothes!"
Re: Doom and Gloom is a Trait and Treat of a Depressive
"Emperor has no clothes!"
That would, in the current social climate, be seen as porn.
Speaking of,... We all know, AI succeeds or falls with the adoption for porn. That is the great thrust driving our economy to new heights of ecstasy.
Wouldn't it be hilarious
if Gartner, Goldman Sachs and all those "visionaries" ware replaced by AI.
I would just love to their faces . . .
The Paperless Office
The predictions in the 80s of how the PC would revolutionize the workplace (paperless office my arse) come to mind. I worked for large aerospace firms and the main change is that loads of admin was pushed upwards to engineers and managers and the people who lost their jobs were secretaries and documentation staff. As an engineer in the 80s I used to hand write reports, photocopy results in my log book and give them to one of the dept secs who would organize it, type it up, correct the English, format, paginate, add contents, etc. and return it to me for checking before entering it into the tech library and distributing it as required. Engineers have to do all that themselves now. The secs also organized meetings, booked lunches, travel, etc. Now, only the directors have admin support, the rest of us are exepected to do all that admin ourselves as well as our proper job. It can take an hour to sort travel out for even a simple trip, but because the PC is on my desk it must be easier for me to do it. In the 80s we had a print room. If you were working on a large bid that needed multiple copies of bid docs in a defined format collating, printing, punching, binding, etc. then that's what they did - and they were bloody good at it. In the 90s the print rooms disappeared and, as a bid manager, I spent many lonely hours late into the night to make sure I had the printer/copier to myself and doing battle with those early collators.
So, colour me cynical about forecasts of how much
Re: The Paperless Office
Imagine the difference in quality of documentation produced the way OP describes here, and what you get when the engineer making the product has to knock it up in their spare time before the ship date.
...oh, wait, we don't have to imagine it. That's what all documentation looks like know. :(
Re: The Paperless Office
You don't get documentation now most of the time, you get a link to some useless fecking youtube video. Or someyou are just supposed to know how it works due to some technological osmosis that apparently happened to everyone after 2004.
Enshittification is everywhere, when you've spotted it once you can't stop seeing it.
Choices choices
So if I could do two things -
1) Aid workers to be more productive by automating repetitive tasks allowing those same worker to achieve the same volume of work in less time but then also allowing them to be more creative in that working time and possibly less stressed and happier due to the interesting quality work being done and possibly business giving workers more time off (possibly a 4 day week) whilst still maintaining production, profit and possibly increasing quality and customer satisfaction.
Or
2)Force workers to be more productive by automating repetitive tasks allowing the businesss remove those resources while maintaining the bare minimum quality standards customers will accept and possibly pushing those remaining staff to 120% of previous hours on the same or possibly reduced wages uitlising the threat of replacement by AI to erode workers expectations. This would increase profits in the short term and keep shareholders happy with record profits again.
What do you think Business will chose?
Doom and Gloom is a Trait and Treat of a Depressive
In a field of billions, what worth is one opinion?