Kayla Holzhauer
Mrs. Straub
AP Economics
7 December 2015
Artificial Intelligence
Technological experts estimate that, “many jobs currently performed by humans will be substantially taken over by robots or digital agents by 2025” (Smith and Anderson). Many innovative people embrace such predictions, but others are concerned by the extent to which humans are relying on computers. While machines likely won’t take over the world Terminator style, it’s no secret that they are already taking over a significant part of our lives. From the spell check on our computers and phones to the machines that have replaced factory workers, technology is everywhere. The argument about “How far is too far?” when it comes to technology isn’t just about moral opinions; technology, specifically artificial intelligence, has already had and will continue to have an impact on the national and even global economies.
On the most basic level, technology impacts consumer demand, which in turn influences which companies make more profit in the long run. Whether it’s a cell phone or kitchen appliance, technology is a means of product differentiation. If Samsung had continued to make flip-phones in the age of the iPhone the company would have gone out of business. Similarly, “if Google figures out a better way to determine what you want to find when you search with them, they're going to earn a higher profit” (Fagella). Artificial intelligence attracts consumers which is beneficial for companies who can keep up with the demand for technology but devastating for those who can’t.
Just over 30 years ago, a mobile phone was unheard of for the common man. Nowadays, most people carry a cell phone with them everywhere they go. Technology has turned items that were historically reserved for the elite, such as televisions, computers, and even refrigerators, into common household items. This is because advancements in technology shift the supply curve upward and allow producers to make more of a good for a lower price. In regards to artificial intelligence and machines that think and perform tasks similarly to a human being, “if a company can come up with robots that build things cheaper than people can, it will gain market share” (Fagella). If more goods are being produced, more money is being exchanged which in turn allows the economy to grow.
The impact that machines have on consumers and producers has an overall positive trend, but what happens when we zoom out and look at the big picture. Many are concerned that “algorithms are poised to obliterate white-collar knowledge-work in the 21st century, just as automation displaced blue-collar manufacturing work in the 20th” (“Machines for Thinking”). While this is a valid concern, people like Vint Cerf, vice president for Google, assure us that "historically, technology has created more jobs than it destroys and there is no reason to think otherwise” (Smith and Anderson). The statistics gathered from the chart below support this opinion. While hard labor jobs in manufacturing may decrease, workers are being displaced because there will always be a need for human ingenuity to be the brain behind the robot.
The study of the impact of technology, specifically artificial intelligence, on the economy poses a frightening realization. Even if we as a country were to decide that technology is becoming too prominent in our economy, “the international marketplace makes it hard for individual governments to slow down their high tech sector because they'll fall behind in technology to other countries” (Fagella). In a way, this is a sort of prisoner’s dilemma because there is no way for us to stop the technological advancement of other countries, even if it eventually leads to a World War III. Our economy cannot survive on the global scale if we don’t continue to advance, so we have little choice but to find new ways to supplement human intelligence. While the social and moral impacts of technology still remain debatable, it is clear that technology is one of the driving forces in our economy and, at least from an economic standpoint, artificial intelligence only enhances that.
Bessen, James. "Toil and Technology -- Finance & Development, March 2015." Imf.org. International Monetary Fund, Mar. 2015. Web. 07 Dec. 2015.
Fagella, Daniel. "Economics And The Future of Artificial Intelligence."Ieet.org. Institute for Ethics & Emerging Technologies, 6 Dec. 2015. Web. 07 Dec. 2015.
"Machines for Thinking." The Economist. The Economist Newspaper, 03 Oct. 2015. Web. 07 Dec. 2015.
Smith, Aaron, and Janna Anderson. "AI, Robotics, and the Future of Jobs."Pewinternet.org. Pew Research Center, 06 Aug. 2014. Web. 07 Dec. 2015.
Technology obviously has a large impact on the economy, especially with production nowadays. In the article, you mentioned that companies with cheaper methods of production would receive a larger market share. Would it be likely that in the future, many other firms would driven out of business, resulting in global monopolies? Many large firms can afford to operate at a loss in the short run and drive other firms out of an industry, so it seems that the former would be a logical prediction.
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ReplyDeleteThis was a very interesting topic because I think technology has more of an impact on economy today than it ever has before. I would like to add to your argument that increases in technology will create more jobs because we will need people to come up with ideas for new technology and people to operate and fix the new technology. However, jobs will shifts from physical labor to more intellectual jobs because technology can replace physical labor but it is harder for technology to replace entrepreneurship. Based on analysis of the factor market, increased technology will increase the demand for labor.
ReplyDeleteTechnology has an unparalleled impact on the economy, so this was a good choice for a blog post. Technology provides jobs and an infinite possibility of what is to come in the future. The point brought up about how businesses that are able to produce products for cheaper tend to perform better and grow more than others due to technology helping them decrease the price of production, could this eventually lead to a global monopoly all across the world? There are laws in the United States about Monopolies but I am unaware of any similar laws in others, which could eventually create a global monopoly with such businesses like Apple.
ReplyDeleteThat's an interesting point you bring up about a global monopoly due to technological growth. Personally I think this would be almost impossible. If we could narrow technology down to one single thing, say cell phones, it would be more likely because all that company would have to do is produce cell phones cheaper and better than anyone else and they could eventually send all the other firms out of business. However, technology doesn't just refer to computers and cell phones, there are a lot of different aspects. Even in the cell phone market, each company uses technology to differentiate their products in different ways whether it be a slicker design or a better camera. The global economy works similarly. Resources are limited so each country can only do so much with their available technology. While some countries use technology for their military, others seek to build the economy by finding more efficient means of production. There will always be countries and companies who have access to better technology and are able to use that to their advantage but I would argue that technology does a better job preventing monopolies than creating them.
DeleteWith the increase of technology we are making many jobs more efficient. Even though there will be lost jobs in the manufacturing industry there will be an increase in jobs for skilled workers as the robots will need maintenance and programmers to keep the factories working. These new jobs would pay better than the old ones and the increase of efficiency would cause the price of goods to go down.
ReplyDeleteIn reality, AI's will most likely take over more dangerous jobs, such as fire fighting and some military operations. Though I think there will be an increase in jobs because we're going to need people to take care of these AI's. Yes they can be programmed to fix each other, but that doesn't mean they would understand if there's a more complicated problem. In reality I don't think they would change the job market that much, more than anything they would reduce having people go into dangerous situations.
ReplyDeleteUsing complex robots for production is a smart idea. Many argue that the robots would be taking people’s jobs. That is true, because instead of people working to build something, technology does it quicker. However, the demand for people to create these robots (or “be the brain behind it” as mentioned in the post) is also something to take into consideration. There are job openings for people to design new technology, physically create it, program it, and fix any problems that may come up over time (this relates to the graph). This just creates more jobs and more and more people are taking an interest in these careers. The repetitive assembly line jobs aren’t as common for people because technology is making it easier. It does cost more money, but it also increases production. People are also able to communicate, travel, and/or design things more easily with computers.
ReplyDeleteI think this is a very interesting article, taking the idea of artificial intelligence and applying it to economics. All that I have read talks about artificial intelligence running a command economy as well as running the government, The artificial intelligence would make better decisions than any politician at a much faster rate. I would like to argue that by 2040 artificial intelligence would be smart enough to command troops on the battlefield. Finally i think nothing short of a world wide EMP could end artificial intelligence.
ReplyDeleteThe concept of more and more technology being used throughout the world is crazy to think about considering how prominent it already is with people being obsessed with every new trend with technology. Overall this will be interesting on how it affects the job market in the coming years.
ReplyDeleteTechnology has clearly grown to be very prominent in our society today. Your essay discussed that although artificial intelligence is taking away manufacturing jobs, it is providing new, more high-end jobs for people to design programs, fix any problems that arise, etc. Hopefully, this change could create a positive trend in the growth of our country's education, as only people with a higher level of education can pursue those careers. However, I fear that these new advancements will only lower the opportunities for the less educated, who already tend to make less money. Could the new wave of artificial intelligence then continue to widen the wage gap and increase unemployment in low-income households?
ReplyDeleteGreat job on your article! I agree that we need to continue to advance as a society, which is why the supply curve is continually increasing as a whole-- more products are able to be made with the increase in technology. However, you compared the company's strategy to an oligopolistic market, but if technology were to make all of the products, then the market might as well be in perfect competition if there is little differentiation in the quality of the products (all made by tech). Soon, the demand will increase for labor, because MRP will be lower with more technology, as businesses will find it more efficient to hire less and less employees. Nice job!
ReplyDeleteTechnology is something that is extremely useful at advancing us as a society. However, I feel that people can take their personal use of technology a bit to far and that further advances in technologies such as cell phones will further the problems that we are already seeing. Aside from personal uses, technology has proven to be extremely beneficial in many fields.
ReplyDeleteI do not believe in good purposes of AI. I consider it as the main rival to the humanity and wouldn't trust much this technological achievement. If you do not share my opinion, you're welcome here to persuade me http://bigessaywriter.com/blog/artificial-intelligence-impact-on-education
ReplyDeleteThe statistics which are very helpful to know about the Artificial Intelligence. Thank you very much.
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