In the past decades, there has been rapid development in the field of artificial intelligence (AI). Generally, the advancements in technology have led to its widespread use, both in private and public sectors. Artificial intelligence is the capacity of a machine to mimic the characteristics and capabilities of a human being (Aghion, Jones, & Jones, 2017, p.2). In other words, the intelligent device can work and react like an ordinary person, by establishing its own way of learning, engaging in dialogues, arriving at conclusions, as well as understanding complex content (Chen, Christensen, Gallagher, Mate, & Rafert, 2016, p.1). The AIs Machines, which can only perform a single task, such as calculations, are commonly known as weak AI. On the other hand, robots that have the human ability to perform multiple tasks with accuracy are called strong AI. However, for any technology to be considered a meaningful success, it has to gainfully improve the human experience. Compared to human beings, Artificial intelligence is making greater contributions in driving the economic sector to a higher level, an aspect that has been witnessed in production, investment, automation, among other spheres of economic growth. Thus, given its potential, more contributions should be expected in the near future.
AI as a Factor of Production
Basically, as it stands, it would appear that we are nearing the limits of human mind, as far as stimulating rapid economic growth is concerned. The double-digit growth that was the norm has dwindled to a single digit or stagnation in most economies. In the past decades, there has been a less than proportionate increase in economic growth with the continued increase in capital and labor (Purdy & Daugherty, 2016, p.4). A century ago, these two variables were sure determinants of the direction of the economy and to what extent it shifted. However, that is no longer the case. Increased capital investment does not guarantee a proportionate bump in economic growth. This phenomenon has led to a wave of understandable pessimism among many people, who feel that global growth is headed for a slump. However, the arrival of artificial intelligence has reignited hope. Instead of looking at it as a technological tool of enhancing other factors of production, we should be encouraged to approach it as a new factor of production. If we choose to think of it as a supplementary too, we risk limiting its power and potential impact (Purdy & Daugherty, 2016, p.3). As its own factor of production, AI will contribute to economic growth in two folds. That is, through the creation of employment and revenue generation as a fully-fledged industry, and as a factor of production.
AI as a Rational Investor
Additionally, the economic system that is currently relied upon operates under the assumption of consumer rationality. That is, in the free market, it is assumed that all players are capable of making rational decisions concerning their investments (Parkes & Wellman 2015, p.2). Rationality in this context refers to the assumption that an individual will attempt to derive the highest possible utility from the resources available to them. However, the concept of rationality is ideal and unachievable since human beings are subject to their biases and flaws, which further influence their decision-making processes. This is not a problem for artificial intelligence agents who can unlearn their biases, and exercise self-improvement in their decision-making processes. Therefore, there is a possibility that this economic model precipitated on rationality might be ideal for artificial intelligence agents, rather than human beings (Parkes& Wellman 2015, p.2). Economics quantifies rationality by correlating decisions with their resultant values in mathematical figures.
The development of AI continues to make steady progress towards the creation of a mythical, perfectly rational agent. If these attempts are fruitful, there is no doubt that the AI will be more successful in the financial and trading markets compared to human beings. Artificial intelligence agents can simultaneously carry out hundreds of transactions with different agents both human and machine with great accuracy, efficiency and speed. However, the problem lies in getting the AI to reason like a person while analyzing financial data (Parkes & Wellman, 2015, p.3). Since the ideal economic man has proven to be a myth, a synthetic economic machine will be far much better in an economy designed for the rationality of numbers. Once the AI agents can read, interpret, and act on data in an economic context, they can be programmed to carry out multi-agent transactions with fellow AI agents as well as human beings (Parkes & Wellman, 2015, p.3). Operations on this scale and magnitude will require a rewrite of the economic laws to account for the near limitless cognitive abilities of the AI.
AI in Automation
The primary goal of AI development was to work in tandem with human beings in the solving of problems that lie on a wide spectrum of complexity (Aghion et al., 2017, p.2). This has been and continues to be achieved in various economic sectors. Following the establishment of artificial intelligence technology, automation is no longer something to be anticipated for in the future, since it has already taken roots in the modern world. AI can be used directly in the production of goods and service, thereby multiplying the speeds of production and quality of the end product. In addition, there is no possibility of failure to meet product demand, since AI can predict demand patterns and adjust the quantities produced accordingly.
In order to put this technology in the context of automation, it is essential to revisit past groundbreaking inventions, their consequences, and the resultant contribution to the growth of the economy at the time. This is because the full potential of the AI has neither been realized nor fully comprehended. Therefore, we have to rely on comparisons with other technologies and their impact on society. For instance, the steam engine entirely changed the movement of people and goods. It hastened the spread of western civilization and set the countries on the path to becoming economic powerhouses. Similarly, artificial intelligence has a broader spectrum of applications, ranging from healthcare, industry, law, to scientific research (Duke, 2017, p.3). The unlimited cognitive capacity of modern day computers and the possibility of incorporating their powers into artificial intelligence agents reflect mind-blowing discoveries in the years to come.
Impact of AI
Unfortunately, it is not easy to accurately predict the impact of artificial intelligence. This is because one cannot be sure about the aspects of the invention that will be a hit or the redundant ones. Depending on the uptake, domestic applications of the AI for personal uses might be more popular than industrial purposes. In addition to that, this impact will also be determined by the rates of diffusion of the technology. This means that AI needs to pierce through barriers and reach the highest number of people, for it to be successful. The diffusion, in this case, includes crossing regional and income barriers, to ensure accessibility to everyone. It can also be measured by the extent to which an individual is reliant on any AI in completing their tasks (Chen et al., 2016, p.3). The rate of diffusion and the importance of AI in an individual's life depend on the number of aspects that relies on its application.
Safety of AI
In the scientific community, the discussion about the artificial intelligence can seldom take place without the issue of safety of this technology coming up. This concern is valid because, despite spending many years on developing and studying artificial intelligence, no individual can certainly say what the limits of an AI are, if any. The primary source of these doubts regarding the safety of the technology reckons in one of its strengths; the ability to improve itself. Artificial intelligence agents can learn processes and grasp concepts faster than the human mind (Duke, 2017, p.3). After encountering given problems over a given period, it can modify its own programming, thereby increasing its efficiency and performance. This has created the fear of the rise of a technological singularity. Consequently, many people are left thinking that invention and development of artificial intelligence will cause runaway technological advancements, which will lead to inevitable changes to human civilization. In simpler terms, it is the fear that AI will grow out of the control of human beings, yet it cannot be trusted to act in their interests.
In conclusion, it is clear that AI can be used as a tool for unfathomable economic growth due to its limitless potential. The economic benefits of AI are currently pertinent than before, as sustainable growth is required to match the unsustainable population growth. Despite the hypothesis of a singularity, it would be prudent to keep up the pursuit of AI since most world-changing technologies available to us today were once discouraged along the same lines of reasoning. Therefore, rather than stopping AI technology developments based on hypothetical, we should pursue it with the aim of increasing the aggregate productivity growth in future.
Aghion, P., Jones, B., & Jones, C. (2017). Artificial intelligence and economic growth. National Bureau of Economic Research.
Chen, N., Christensen, L., Gallagher, K., Mate, R., &Rafert, G. (2016). Global economic impacts associated with artificial intelligence. The study, Analysis Group Boston, MA, February, 25.
Duke SciPol. (2017). Artificial intelligence, automation, and the economy. Retrieved from http://scipol.duke.edu/content/artificial-intelligence-automation-and-economy
Lee, Christine. Artificial intelligence, automation, and the economy. A White House Report.
Parkes, D. C., & Wellman, M. P. (2015). Economic reasoning and artificial intelligence. Science, 349(6245), 267-272.
Purdy, M., & Daugherty, P. (2016). "Why artificial intelligence is the future of growth."Accenture. Retrieved from https://www.accenture.com/lv-en/_acnmedia/PDF-33/Accenture-Why-AI-is-the-Future-of-Growth.pdf
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