Robots Will Enable Western Countries to Dodge Weakening Demographics
Artificial intelligence has no shortage of detractors — from prophets such as Stephen Hawking or Elon Musk, who both once compared A.I. to "summoning the demon" in a horror film, to everyday workers who are anxious about machines replacing them. But robots, A.I. and other new technological developments could take off in countries where there is a demographic bomb, namely in the advanced countries which also have a strong economic base and pool of innovators. Those countries include the United States and the European countries, but also Japan, China, South Korea and Taiwan. Indeed, many doomsayers have argued that an aging population poses a considerable threat to economic growth.
Pundits believe that prosperous countries in the West, not to mention China, are headed towards secular torpidity as the size of their old, retired population increases while the size of the young, working-age population shrinks rapidly due to low fertility rates unless they welcome mass migration from the developing countries.
On the other hand, states like Nigeria and India, for instance, are foretold to benefit from much higher economic development in the coming decades ahead as a higher number of young people get into the workforce due to favorable demographics. The primary worry among these doomsayers is that as a more significant portion of the population is getting old and lives longer; fewer young people will be available to the workforce and serve the necessities of a more extensive population, which will reduce the per capita income, and thus lead to economic stagnation.
If you do not embrace new artificial intelligence and robotics, and find ways to make up for shortages of youth labor, you're going to have a slowdown of potential growth. A nation's growth potential is driven by capital, labor, and productivity. A deceleration in a country's labor force growth signifies it has to bank a lot more on productivity to maintain its economic growth. That's where machines can assist since they can process information faster and carry out tasks more quickly than humans.
Concomitantly, the rationale that mass migration in the West is needed to compensate for an aging population is also being swayed away by the coming of robotics and A.I. Indeed, there will no longer be a need for Western countries to allow for mass migration as robots will be there to replace the declining local population while maintaining or even increasing the economic productivity in these countries.
As such, Japan is an exciting country to observe as a place where a robotic and A.I. revolution could kick off. Indeed, because Japan has gotten a falling and aging population, it requires machines, A.I. and all this to start replacing labor.
Unlike many Western scholars and political leaders, the Japanese government authorities do not fear robotics and A.I. as they strongly believe that technology could assist the nation to grow, even though it has a very pressing problem of aging population. In the meantime, it's already in place: earlier this year, Japan opened two hotel facilities that are staffed mostly by robots.
As such, what could be saving the West from the adverse effects of aging is the increasing adoption of technologies performing tasks previously undertaken by labor (cf. robots). So, even when a nation’s population ages and the size of its young, working population shrinks rapidly, it can counterbalance for the loss in economic growth and tax revenues by adopting better technology. Indeed, technology improves productivity by allowing countries to do the same work using a smaller workforce, thus overcoming the effects of aging.
Supporting such rationale is that falling automation costs will make the adoption of robots and A.I for daily use way more affordable and allow for the utilization of such technologies on even more widespread basis.
One thing that could incite the greater adoption of labor-saving technology is the increasing scarcity of young, working-age people. As the population of a country age, the supply of labor decreases and drives up wages. This, in turn, pushes businesses to adopt technologies that can help them save on labor costs. In other words, the adoption of labor-saving technology is just a natural market response to a shrinking human population.