The Impacts of AI on Manufacturing, Trade and Labor Market

Abstract

Artificial intelligence is becoming increasingly significant in our lives and economy, and it is already affecting our environment in a variety of ways. The race to enjoy its benefits is hot around the world, and global leaders — the United States and Asia – have emerged. Many people consider AI as a source of increased productivity and economic progress. By analyzing enormous amounts of data, it can improve the efficiency with which things are done and dramatically improve the decision-making process. It can also result in the development of new products, services, markets, and industries, increasing customer demand and providing new revenue streams. However, AI has the potential to be extremely disruptive to the economy and society. Some fear that it would lead to the formation of super corporations — wealth and knowledge centres – which will harm the economy as a whole. It may also exacerbate the gap between developed and developing countries, as well as increase the demand for individuals with specific talents while displacing others; the latter tendency could have far-reaching implications for the labor market. Experts also warn that it has the potential to widen inequality, lower wages, and reduce the tax base. While these worries are legitimate, there is no agreement on whether or not the associated hazards will materialize. They aren't certain, and a well-crafted policy might encourage AI research while limiting its negative consequences.