Gotta Get Ready for the AIternative

This article was first published in the Economic Times. https://economictimes.indiatimes.com/opinion/et-commentary/view-gotta-get-ready-for-the-ai-ternative/articleshow/110602202.cms

Over the last two decades, the combination of mobility, cloud and internet technologies have moved us to lifestyles and consumption patterns only the best futurists could imagine in the 1990s. We think nothing of buying insurance online or checking a digital map for traffic. We consider a visit to a bank branch as some sort of exotic outing. This has been an extraordinary shift at a blinding pace. What’s coming next is even more profound.

The next generation of technologies, including AI, nano robotics, space tech and battery tech have taken hold. Their impact is much deeper than was visualised even a decade ago. The AI revolution, catalysed by the power of ChatGPT, is igniting deep transformations in areas as diverse as advertising, advanced drug discovery, and supply chain and logistics management. In the process, spending on new technologies has burgeoned. Expenditure on various types of AI is already at $184 bn annually, according to Statista, with projected growth at 28% CAGR. So, what are the deeper, longer-term implications for humanity?

It turns out that AI may reshape economic thinking completely. Historically, as a country’s population ages, its GDP can’t grow beyond 4-5% a year, at best. The reasons are simple: more stress on healthcare and social security, while the productive population — that can drive economic activity and generate tax revenues — shrinks. But what if technology allows for the absolute replacement of human workers by digital workers (software)? These digital workers can man call centre stations, check in people at a hotel front desk, route trucks for a logistics company, and remind the chronically ill that their medicine is due. There can be software bots trained to be anti-money laundering (AML) agents, which ‘marry’ data with their software so that a bank can get a completely virtual AML ‘analyst’ that works 24 hours, never takes a holiday, doesn’t require maternity or paternity leave, and doesn’t fall ill. Nissan, for instance, is on-stream with its automated factory in Kamino Kawa in Japan. An entire car manufacturing plant is run by robots. Previously, humans were needed to examine the quality of the machines’ work. Now, machines are smarter and leverage data and AI to learn from mistakes and make corrections automatically.

If machines and software can completely replace human workers, new economic models need to be imagined. Theorists are already propagating an income-tax of sorts on these ‘digital workers’. This scenario breaks out the economy from the working-age population trap while simultaneously generating tax revenues to take care of the elderly and build new infrastructure.

What about the people being displaced? Unlike how the current tech industry narrative has it, AI won’t augment humans, they will replace them. While augmentation may be a starting point, searing job losses are on the way. The obvious starting point is the decimation of the call centre industry. Digital workers are going to replace humans at a rapid rate. Within a decade, call centres run by BPOs and in-house by banks and retailers will go the way of the horse and carriage. According to Statista, the call centre industry globally turns over $340 bn annually, with millions of workers gainfully employed. Visualise any role that’s repetitive and you’ve identified future job losses: researchers, accountants, administrators.… There is a lot of short-and medium-term pain on the way. Governments will do well to plan amelioration measures. In India, the following can be considered:

>Use of National Skill Development Council infra to initiate large-scale reskilling programmes for those likely to be rendered jobless by AI. These need to be done now as the tsunami is visible. Waiting until it hits is going to cause an extraordinary amount of pain to the million-plus workers in the BPO-call centre ecosystem.

? Renewed focus on labour-intensive industries such as construction, food service and tourism where the impact of AI might be relatively lower, and where new jobs may be created immediately.

? Some form of universal basic income (UBI) to assure people of a dignified existence as they make the painful transition to a new career. Money in their hands will also serve to drive consumption, and that will be a positive for the economy.

In the longer term, these new technologies will unlock new forms of economic activity that are hard to visualise today. Undoubtedly, the tipping point — singularity — where machine intelligence overtakes average human intelligence, is the motherlode. It changes everything. We must prepare for it today.