The White House report: Artificial Intelligence, Automation, and the Economy 2


Artificial Intelligence, Automation, and the Economy – The White House released a new report on the ways that artificial intelligence will transform our economy over the coming years and decades.
Accelerating AI capabilities will enable automation of some tasks that have long required human labor. These transformations will open up new opportunities for individuals, the economy, and society, but they will also disrupt the current livelihoods of millions of Americans. The new report examines the expected impact of AI-driven automation on the economy, and describes broad strategies that could increase the benefits of AI and mitigate its costs.

AI-driven automation will transform the economy over the coming years and decades. The challenge for policymakers will be to update, strengthen, and adapt policies to respond to the economic effects of AI.

Although it is difficult to predict these economic effects precisely, the report suggests that policymakers should prepare for five primary economic effects:

  • Positive contributions to aggregate productivity growth;
  • Changes in the skills demanded by the job market, including greater demand for higher-level technical skills;
  • Uneven distribution of impact, across sectors, wage levels, education levels, job types, and locations;
  • Churning of the job market as some jobs disappear while others are created; and
  • The loss of jobs for some workers in the short-run, and possibly longer depending on policy responses.

Media response to the report:


Analyst viewpoint:

The White House Gets It Half Right on Artificial Intelligence—Mostly Rejecting the False Notion That It Kills Jobs, But Promoting the Canard That It Creates Inequality

In response to the White House’s new report, “Artificial Intelligence, Automation, and the Economy,” released today, the Center for Data Innovation, a data and public policy think tank, issued the following statement from Director Daniel Castro:

The Obama administration has become progressively more supportive of AI-driven innovation, but this report shows that federal policy must continue evolving if we are going to capture the full benefit of the technology.

This new White House report rightly extolls AI’s potential to create economic and social benefits, and it proposes a number of sound policy recommendations to encourage further development and adoption of the technology in the coming year. Unfortunately, it gives some credence to those who fear that technology-driven automation eliminates jobs before acknowledging that automation also creates new ones. The report also gives undue credence to those who continue to speculate that AI will exacerbate inequality. We urge policymakers, including the incoming Trump administration, to keep these claims in perspective.

The White House is wrong to suggest that AI will power a productivity explosion so great that it destroys jobs faster than the economy can keep up. That idea vastly overestimates the ways in which AI will be able to replace people—and it underestimates the extent to which productivity gains create new job opportunities by putting more money into the economy.

It is encouraging that the White House readily acknowledges the large potential economic benefits of AI-driven innovation, and that the government should pursue a mix of policies and incentives that can maximize the economic benefits of AI, such as increasing access to higher education for low-skilled workers, providing strong government support for research and development related to AI, and strengthening social safety net programs to promote worker retraining. The White House correctly notes that the bulk of new jobs created by AI will not be high-skilled technical jobs, such as computer scientists, as many suggest, but instead will be in other sectors of the economy where companies benefit from AI-driven productivity gains and can thus invest in expanding their market share, such as retail stores or restaurants.

Despite the report’s unwarranted notes of caution, it is a welcome addition to the chorus of voices recognizing the positive potential of AI and the need to have government actively support its development.

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The Center for Data Innovation is the leading global think tank studying the intersection of data, technology, and public policy. With staff in Washington, DC, and Brussels, the Center formulates and promotes pragmatic public policies designed to maximize the benefits of data-driven innovation in the public and private sectors. It educates policymakers and the public about the opportunities and challenges associated with data, as well as technology trends such as predictive analytics, open data, cloud computing, and the Internet of Things. The Center is a nonprofit, nonpartisan research institute proudly affiliated with the Information Technology and Innovation Foundation. For more about the Center, visit datainnovation.org.

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