EU recently suggested larger tax bills for the tech-giants. But who has the last word in the technological development: ethical perspectives, business consequences or social protests?

How will AI affect our future?

Many heads of states, business- and tech-giants talk about artificial intelligence as the fourth industrial revolution after the internet, the assembly line and the plow. In January 2019, The World Economic Forum held their annual conference in Davos in Switzerland, where the global business elite discussed the biggest threats our world is facing right now. According to their Top 10 Risks by Likelihood in the Global Risks Report, climate change, data fraud and cyberattacks are in the top.

Digital responsibility

On February 4, 2019, the Danish government came up with eight new initiatives to strengthen the digital responsibility area. This included a data ethics council, a statutory requirement for reporting large business data ethics, and a “data ethics label” among the initiatives to strengthen the digital responsibility of businesses, and make it easier for consumers to choose businesses with their data ethics in order. The Minister of Business and Industry, Rasmus Jarlov, states that “It benefits our trust in the companies and can give them a competitive advantage internationally”.

But should this responsibility also include a reflection on who is gaining and who is losing in the digital future job market? Because AI works faster, better and cheaper than human beings, it may create a lot of free time for employees, but can also cause potential unemployment.

Who gains?

We have already seen that a lot of industrial workers have been replaced by machine learning, which raises concerns in many different disciplines, including lawyers, doctors, journalists, musicians and others. How many employees will be redundant in the future and how do we adapt to the digital revolution? The entrepreneur from Silicon Valley, Martin Ford, has for the last couple of years commented on how AI will affect the future job market, where he fears that a small elite with a few big tech companies will benefit from this and we will experience an extreme global inequality and as a result of this, a decrease in the economic growth if there is no one to consume the things the machines are producing. As a result of this, Ford suggests a citizen salary where everybody will get a small amount of money unconditionally. However it is not everybody who are pessimistic about a future with AI.

The financial benefits of AI

A research from the McKinsey Global Institute from September 2018 attempts to simulate the impact of AI on the world economy. McKinsey’s research concludes that new investment in AI can, on the contrary, increase employment by five percent by 2030. There will very probably be costs during the transition period, but even when conversion costs and competitive effects are included, AI might add about 13 billion US$ to total production by 2030. This means that the global gross domestic product could increase over one percent a year. However, who will get these 13 billion dollars? Despite the economic gain, AI will affect the job market differently and it will affect countries differently. The research suggests that the number of job profiles characterized by repetitive tasks and limited digital knowledge may fall from about 40 percent of total employment to somewhere near 30 percent by 2030. At the same time, the jobs that include non-repetitive activities or require digital skills at a higher level, are likely to increase from about 40 to over 50 percent. This conversion therefore causes a potential gap in wages between various jobs, where employees without digital skills and with repetitive tasks, may experience wage stagnation, and this will result in a decrease from 33 to 22 % in the part of the total payroll.

How can we prepare the job market for AI?

Because the automation takes hold, and it affects the job market and positions differently, the policy makers will need to show bold leadership to overcome understandable discomfort among citizens about the perceived threat to their jobs. Furthermore, the research from McKinsey suggests that the big companies must choose to actively upgrade their teaching in AI for low-skilled employees to match the dynamically changing job market.

If we do not include the ethical and political consequences the technological development has on the society, we may risk that the technological development ultimately forms the basis of extensive anger, frustration and social unrest. In countries where an academic and economic elite have led the agenda, we have already seen protest movements such as the fact that Trump became the president of the United States of America, Brexit and lastly The Yellow Vests in Paris. We may experience that a large group of the population feel that the economic development, despite progress in many places, do not benefit them. If the potential frustration that may be a result of the unequal distribution of profits, is neglected and overlooked, it might trigger a setback against technologies, that should have created a good circle of higher productivity, growth, and more jobs in the economy overall.

 

Want to know more?

You are welcome to join our next event here where we will discuss how technology will shape our society with a fireside chat with Marianne Dahl, CEO Microsoft Denmark. You are also welcome to comment below, we would love to hear your thoughts and suggestions.

 

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Sources: Global Risk Report 2019, (World Economic Forum)  —  The impact of AI (McKinsey Global Institute)  —  8 new initiatives to strengthen the digital responsibility (The Danish Ministry of Business of Industry) — DR News (DR.dk)