Rethinking UBI: Lessons from Sam Altman’s Trial and Global Implications

Tech companies like Sam Altman’s OpenAI have been trialling Universal Basic Income (UBI) programs, and it’s important to consider their motivations. One primary reason might be to mitigate the social disruption caused by AI and automation, which are expected to displace millions of jobs. By supporting UBI, tech companies can present themselves as socially responsible, easing the transition for workers displaced by their technologies. Additionally, a stable consumer base with disposable income ensures continued demand for their products and services, which is vital for their long-term profitability.

Implications for Workers in Developing Nations

However, the global impact of AI on employment is profound, particularly for freelancers, copywriters, designers, and translators in developing countries. As AI takes over these roles, the livelihoods of many in countries like Bangladesh could be threatened. The critical question is, who will fund UBI for these workers? It’s unlikely that a U.S. tech company would extend financial support to compensate for job losses globally. This disparity could exacerbate economic inequalities, leaving developing nations without a safety net as their traditional job markets shrink.

Lessons from Sam Altman’s UBI Trials

Sam Altman’s three-year UBI trial, the largest in the United States, provided 3,000 participants with either $1,000 per month or $50 a month as a control group. The study revealed that recipients primarily used the money for essential needs such as food, rent, and medical bills. The UBI did help participants to be more selective in their job choices, often opting for roles that were more fulfilling but lower-paying. However, the UBI did not significantly improve access to healthcare or job quality, highlighting that $1,000 a month might not be enough to overcome larger systemic barriers to healthcare access and economic mobility. Despite these mixed results, Altman remains a strong advocate for UBI as a necessary adaptation to the labour market disruptions caused by AI (NewsBytes) (Basic Income Today).

Dependence on Profitable Tech Companies

These findings underscore a critical point: while UBI can provide immediate financial relief, its long-term sustainability depends heavily on the profitability of tech companies willing to fund it. If a tech company paying UBI to thousands or millions of people were to fail, it would create a national crisis. Governments might feel compelled to prop up these companies, stifling competition and innovation from startups and challengers. This dependency could lead to a concentration of power and wealth, undermining market dynamics and economic diversity.

Encouraging Risk-Taking and Innovation

For any country to maintain its standard of living or advance from developing to developed status, it needs an environment that encourages risk-taking and innovation. Sweden provides a relevant example. Sweden’s comprehensive social safety nets, including free healthcare, education, and support for entrepreneurs, create a conducive environment for innovation. In fact, Sweden boasts one of the highest rates of millionaires per capita, a testament to its supportive ecosystem for risk-taking and innovation. As of recent statistics, Sweden has approximately 3.7% of its population classified as millionaires, higher than many other countries. This success is attributed to their policies that lower the risks associated with entrepreneurship and provide ample support for new ventures.

Sweden’s innovation policies include substantial government funding for research and development, tax incentives for startups, and public-private partnerships to drive technological advancements. The Swedish Innovation Agency, Vinnova, plays a crucial role by funding and supporting projects that aim to solve societal challenges through innovation. Additionally, Sweden’s education system fosters creativity and critical thinking from an early age, ensuring a steady pipeline of innovative thinkers.

Challenges for Developing Countries

In contrast to the advanced economies, we still see countries struggling to cross the chasm. Low-skill manufacturing and tourism can only take you so far. Cutting-edge innovation is critical for countries to build on successful foundations of manufacturing and be ready for the inevitable wage rises that come from this success, channeling their profits and wages into a thriving entrepreneurial ecosystem. This is demonstrated by countries such as South Korea and Israel.

While there were high hopes for the countries known as the BRICS, Brazil and South Africa have not emerged as the promising contenders for advanced economies they were once touted to be. Innovation plays a significant role in this. Brazil faces challenges such as bureaucratic red tape and limited access to funding, while South Africa struggles with high unemployment rates and socio-economic inequalities. These systemic barriers prevent real innovation from taking root, highlighting the need for a supportive environment that encourages entrepreneurial risk-taking and provides the necessary infrastructure and resources.

When I spoke with ministers from the government of Tunisia earlier this year, they were acutely aware of the opportunities offered by AI but recognised that these opportunities could only be realised if channeled into innovation. Hence, they were launching a new AI school in English, aiming to equip their workforce with the skills necessary to compete globally.

The Global Perspective on UBI

For those who read my articles, you know that I am strongly against UBI if it places more power and control in the hands of the few. We must ask how UBI can provide the impetus for innovation and help countries worldwide move towards environments where risk is permitted and even encouraged. However, it is crucial to question whether U.S.-generated profits would only be offered to U.S. citizens. Most major tech companies outside of China are headquartered in the U.S., raising concerns about global economic equity.

Conclusion: Rethinking UBI for a Sustainable Future

To truly harness the benefits of AI and UBI while fostering innovation, we need a conscious effort to create environments that support risk-taking and entrepreneurial ventures. This involves not just providing financial support but addressing systemic issues that hinder progress. UBI must be designed to fuel innovation and economic growth globally, ensuring that the benefits of technological advancements are shared equitably. By promoting policies that encourage entrepreneurship and provide robust social safety nets, we can create a sustainable future where both developed and developing nations can thrive.

A well-structured UBI could indeed fuel innovation if it creates a safety net that allows individuals to take risks without the fear of complete financial ruin. By ensuring that basic needs are met, UBI could free people to pursue creative and entrepreneurial endeavors, much like Sweden’s supportive ecosystem. However, this would require a global perspective on UBI, ensuring that the benefits of technological advancements do not remain confined to wealthy nations but are shared equitably to foster worldwide innovation and growth. This holistic approach would not only address immediate financial needs but also build a foundation for sustainable development and inclusive economic progress.

Richard Foster-Fletcher ?? (He/Him) is the Executive Chair at MKAI.org | LinkedIn Top Voice | Professional Speaker, Advisor on; Artificial Intelligence + GenAI + Ethics + Sustainability.

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