|Robots, A.I., and the future of economic growth||Robots, A.I., and the future of economic growth||Luis B. Torres||Torres||2019-01-24T06:00:00Z||Economy|
The low rate of U.S. productivity growth—and, consequently, the fall in potential GDP growth—in the past eight years is unprecedented. Technological advancements can help reverse that trend, but it takes time to see their benefits. For example, productivity gains from computers in the '80s didn't show up until the '90s.
Recent data do not show the current wave of innovations in robotics, artificial intelligence (A.I.), and other fields as having any greater impact on business methods and techniques than earlier industrial revolutions did. In fact, automation—as exemplified by computer numerical control machinery, industrial robots, and A.I.—has raised concerns about widespread joblessness.
For centuries, people confronted with labor-saving tools and machines have been concerned not only about the effects these new tools and machines would have on their incomes, but also on the nature of their work and lives. But like past technological waves, automation will bring new jobs that increase labor demand, wages, and employment. The negative effects of automation will be counterbalanced by the creation of new tasks in which labor has a comparative advantage.
If the benefits of introducing new tasks outweigh the negatives of replacing labor with machinery, the result will be higher wages and employment. Currently, the implications of automation for wages and employment are not entirely understood. Workforce education plays a pivotal role given that industries that are relatively education-intensive have greater value and show faster productivity growth.
If productivity growth continues to depend on automation instead of labor, the relative standing of labor, together with the task content of production, will decline. The creation of new tasks and other technologies raising the labor intensity of production and the labor share are vital for continued wage growth commensurate with productivity growth.