In the last few years, several big names have made statements they will likely have to take back in the future. In particular, Elon Musk recently made the claim that artificial intelligence is poised to take over so many human jobs, that the government will need to step in with a basic income to prevent chaos.
AI, is progressing quickly, that is sure, but the effect of its application for the broader economy is less well understood. Economist like Schumpeter have long reminded us that the ‘gales of creative destruction’ are actually a force for good, and should not be feared.
How will this play out?
Just for fun, let’s pick on The Inquirer’s 5 recent picks: personal assistants, cab drivers, technical support professionals, factory workers, and doctors (yes, medical doctors).
What happens when human drivers become obsolete? Transportation costs fall, empowering people to do more importing and exporting. Entrepreneurs will more easily find new markets and consumers will more easily access goods and services.
What happens when human personal assistants are replaced? Everyone can now afford a digital assistant, which means they can get more done. Entrepreneurs have a lot of work to do. Starting a business often entails taking on many of the organizational functions that will eventually be done by employees. What entrepreneur wouldn’t welcome a low cost personal assistant?
Technical support professionals
What about technical support specialists? Surely this will boost productivity for everyone, especially technology entrepreneurs. Faster, more competent technical support means that entrepreneurs can get their technology working and get their products out to market. It also means they can offer technical support for their own products and services more economically. Yet another barrier to entry out of the way.
Factory workers. Come on! Factory work has been evolving rapidly for 200 years. The more machines take on, the lower the cost of manufacturing, the better off we all are. It means more entrepreneurs can afford to have their prototypes put into production. It means more innovative new businesses popping up!
This is probably the funniest example in the list. It’s hard to imagine doctors being replaced by AI, but let’s entertain that possibility for a minute. Doctors are well paid today because there are too few of them. For example, in Cuba, where doctors are in abundance, they are paid similar wages as school teachers. If AI takes over some of the jobs that doctors do, we can expect that doctors will move on to other higher value tasks. This is likely to result in better care at a lower cost. For entrepreneurs, that means that lower healthcare costs, and in places where employers chip in to pay for employee healthcare, it means the ability to hire more employees.
Don’t worry, entrepreneurs will step in!
In conclusion, the overall impact of AI will be to boost entrepreneurship, which in turn creates new jobs. That’s not something we need to fear.