AI has the potential for changing business practices and jobs, with implications for society and the economy.

The Potential of AI

AI can replace routine and professional jobs, leading to social and political implications.

The Impact on Workers

Technological changes favor those with advanced education, leading to income and wealth inequality.

Technological Changes and Inequality

AI will disrupt industries and potentially increase income and wealth inequality.

Disruption and Sector Changes

There are differing views on the future of jobs, with potential new jobs and risks of job loss.

The Future of Jobs

AI will shift the income distribution and require public policies to address societal needs.

Income Distribution and Public Policies

AI will impact business models, the role of the state, and the relationship between sectors.

The Role of AI in Society

All businesses will benefit and be challenged by AI, leading to productivity gains.

Businesses and Artificial Intelligence

There are design challenges in AI algorithms to ensure inclusive and sustainable growth.

Design Challenges and Growth

The concentration of AI talent in a few companies affects innovation, profits, and talent distribution.

Talent Distribution and Profitability

## Newsletter

### The Impact of AI on Business Practices and Society

AI has the potential for really changing a lot of business practices. Businesses are already aggressively investing in these new technologies. It's going to change jobs. A lot of people are going to find that the jobs that they've been remunerated for in the past are not going to be the jobs in the future. There's so many design challenges. How can we make sure these algorithms take into account issues that we know we care about? What kind of planet do we want to be living on? What kind of growth do we care about? Is it just growth for growth's sake, or is it inclusive and sustainable growth?

- AI can bring new efficiencies and make our lives easier, but it will also lead to job losses, especially among professional workers.
- The winners of AI will benefit greatly, while significant parts of society may fall behind.
- AI has the potential to increase income and wealth inequality.
- The role of the state and corporations will be transformed in a world with AI.

AI is coming on rapidly, and businesses are scrambling to invest in these new technologies. However, the full impact of AI may take several years to be fully realized.

The big questions surrounding AI revolve around privacy, data usage, and design challenges. It is important to ensure that AI algorithms take into account the values and goals of society, such as human rights and sustainable development.

In the current landscape, a few companies dominate the AI talent pool, leading to excessive profits and rents. It would be healthier for the talent pool to be more distributed.

Stay tuned for more updates on the impact of AI on business practices and society in future newsletters!


The Impact of AI on Business Practices and Society

Professional workers with advanced degrees

- AI has the potential to change business practices and is being aggressively invested in by businesses.
- It will change jobs, with many people losing their jobs to AI.
- There are design challenges in ensuring that AI algorithms take into account important issues such as sustainability and inclusivity.
- AI could increase income and wealth inequality, favoring those who own the machines or have advanced skills.
- There may be new jobs created by AI, but there is also a risk of many jobs being at risk.
- Public policies need to be developed to address the potential negative impacts of AI and ensure fair outcomes.
- The relationship between the public sector, corporations, and NGOs may need to change in response to the impact of AI.
- AI will have a big impact on businesses, benefiting them through productivity gains but also posing challenges.
- General-purpose technologies like AI have historically influenced major changes in the economy.
- There are design challenges in AI, including privacy concerns and the need to ensure algorithms consider important issues.
- The distribution of talent in AI research needs to be more balanced.
- Overall, AI has the potential for significant impact and requires careful consideration and management.

As artificial intelligence advances and earns more investments, it poses an even bigger threat to all kinds of workers.

Former Secretary of Labor Robert Reich warns that artificial intelligence will not just displace manufacturing jobs but also workers in the knowledge economy.

Columbia University economics professor Jeffrey Sachs predicts that workers will need to adapt to new skills and roles in order to thrive in the changing economy.

Moody’s Analytics’ chief economist, Mark Zandi, cautions against overreacting to the potential job displacement caused by AI. He suggests that AI will follow a similar pattern, gradually impacting the job market over an extended period.

University College London professor Mariana Mazzucato says inclusive and sustainable growth is particularly important in the context of AI, as these technologies have the potential to exacerbate existing inequalities if not carefully harnessed.

In this episode of "The Bottom Line," watch top economists discuss the winners, and losers, of the ongoing AI revolution.

Chapters:
0:00 Introduction
0:43 Who will fall behind?
2:40 How jobs will change
7:00 Algorithmic challenges

Produced and Edited by: Mark Licea, Jack Hillyer
Supervising Producer: Lindsey Jacobson
Graphics by: Jason Reginato
Additional Footage: Getty Images

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Who Will Be AI’s Winners And Losers | The Bottom Line

AI has the potential for really changing a lot of business practices.

Businesses are already aggressively investing in these new technologies.

A lot of people are going to find that the jobs that they've been remunerated for in the past are not going to be the jobs in the future.

How can we make sure these algorithms take into account issues that we know we care about?

What kind of planet do we want to be living on?

Is it just growth for growth's sake, or is it inclusive and sustainable growth?

Well, we're all going to benefit to the extent that there are new efficiencies, we can buy things cheaper, we can get AI embedded in all sorts of gadgets, and therefore our lives become just easier.

On the other hand, there will be a lot of casualties in terms of workers, not just the routine workers that were in the factories that got replaced by software over the last 30 years, but we're gonna see more professional workers who are actually going to be losing their jobs because AI can do those jobs at least as well as they can and far more efficiently.

And it's going to have tremendous social and political implications because a lot of those professional workers are used to doing fairly well.

We're now talking about the middle class of America.

And AI could very easily be taking over many of those jobs.

To say that everybody benefits has never been true in economic history or economic change.

There will be actually significant parts of society that will fall behind.

Major technological changes, and they don't happen all that often.

The steam engine was 1, electrification was another.

The winners win more than the losers lose.

Even in the last 40 years, 50 years, the nature of technological change has favored those with more advanced educations, higher degrees, technical educations, and so on.

This has been a clear trend for the last 50 years.

That means a lot of people have been left behind in the United States.

Heads of AI who are billionaires are libertarians.

They say, oh, leave everything alone, leave it to us.

Well, that's easy if you're a billionaire, but it's not so easy if you've lost your job.

In this sense, I think that we really need to have a fair assessment of this great potential technology to make sure that it works for society broadly.

Artificial intelligence, machine learning, robotic automation can affect the way they're using labor.

AI is going to have major disruptive effects.

Some firms are going to survive, some of them will disappear.

Entire sectors of the economy will be radically changed by AI.

There's also the risk that AI is going to increase income and wealth inequality.

These technologies are capital intensive, skill biased and labor saving.

If you own the machines or the capital that owns the machines, you do well.

If you're in the top 10 percent distribution of skills, education, human capital, Probably AI makes you more productive and efficient, but if you are a low or medium value added worker, your jobs and income could, could over time be at risk.

1 view says that there'll be tons of new jobs of the future that we don't even know of, so there'll be always a demand for labor.

The other 1 is more dystopian and worries that eventually many jobs, initially cognitive, white-collar jobs that are low-value added, then blue-collar jobs, eventually cognitive and creative jobs could be, you know, at risk.

Of course, if the economic pie is larger, because you have higher potential growth and productivity growth, you can always tax those who are better off, those that are winners, and then redistribute income to those who are left behind.

The returns to owning AI, to owning the intellectual property, will soar.

And that's why we have new trillion-dollar companies.

But for a lot of Americans, it actually means lower real earnings, not higher real earnings, because it means a shift of the income distribution.

And we need to understand all of this better so that we can actually make public policies that say, oh, AI is a great thing, but this part of society is going to need help.

This part of society is going to be so incredibly rich that they actually should pay some more taxes.

This topic of AI is really fever pitch now in all the areas that I inhabit as my work, as an investor, as an economist, as a board member, as a public policy person.

I think it's a longer game than perhaps people are thinking about, but at the micro level it could have a meaningful impact, not just on business models and how companies constitute themselves and think about allocating resources like capital and labor, but also I think it could be incredibly transformative for the role of state.

If indeed we end up with a lot more people who are out of work, which some estimates assume that that might be the case.

We might see a new rope of state and obviously a real challenge to what the role of corporations is, given that on the 2019 Business Roundtable, a pledge to revamp the role of corporations, not just think about financial shareholders, but to think about stakeholders broadly.

So in a world where more people are out of work, we have to think about how society is growing.

In this laborless growth model, there's a lot more questions that will emerge around AI.

And of course, I have not even talked about the risks to the downside.

My thesis is that we're going to see a much closer relationship between the public sector, including the third sector, the NGO sector, and corporations.

At least that's what we would hope to see.

Because I think ultimately, we all should be pulling together to have better outcomes for economic growth but better outcomes for society.

AI has potential for really changing a lot of business practices.

It does take time for those technologies to be incorporated into business practices and have a big impact.

We tend to see the technology, we can see it, we can feel it, we can taste it, we know it's coming, therefore it should happen immediately.

It happens over periods of several years, even a couple decades.

But I think all businesses will benefit and also be challenged by artificial intelligence.

And of course, the benefit is productivity gains.

I mean, businesses are scrambling to try to figure out how to raise the productivity of their labor force.

They know that it's gonna be hard to find workers in the future given demographic trends, aging out of the workforce by boomers and weaker immigration.

General-purpose technologies, which include new forms of energy, even includes like mass production, includes nanotechnology, these have often influenced new changes in production and distribution and consumption, right?

So it means a new technology, a new technological revolution that impacts the whole economy, not just 1 little gadget or something.

Even Google's algorithm was financed from the National Science Foundation, the internet was financed by DARPA, GPS was financed by the Navy.

The big questions we're asking today around AI, but even just big tech in general, in terms of privacy, how our data is being used, do we know how it's being used, the GPT now 5.0 or whatever, we're coming to, there's so many design challenges.

Just look at the Human Rights Declaration, right?

There's a lot of good information there, but also the Sustainable Development Goals.

These are all important in terms of defining What kind of planet do we want to be living on?

Or is it inclusive and sustainable growth?

So there's real design challenges, especially today where a lot of the talent that used to be distributed is in 4 or 5 companies around artificial intelligence.

So there's profits being earned in excess of the underlying innovation.

That has then affected massive, what I call, rents, which are used then to hire in some of the top workers, labor, to work for the companies.

Much of this, if you look at AI, used to be in universities, places like Stanford, MIT.

It's now much more profitable for top academics to be doing artificial intelligence research for the big 4 or 5 companies in this space and not in universities or even not in DARPA.

What I think is healthy would be if that talent pool was distributed.


Speaker 0: AI has the potential for really changing a lot of business practices. Businesses are already aggressively investing in these new technologies.

Speaker 1: It's going to change jobs. A lot of people are going to find that the jobs that they've been remunerated for in the past are not going to be the jobs in the future.

Speaker 2: There's so many design challenges. How can we make sure these algorithms take into account issues that we know we care about? What kind of planet do we want to be living on? What kind of growth do we care about? Is it just growth for growth's sake, or is it inclusive and sustainable growth?

Speaker 3: Well, we're all going to benefit to the extent that there are new efficiencies, we can buy things cheaper, we can get AI embedded in all sorts of gadgets, and therefore our lives become just easier. On the other hand, there will be a lot of casualties in terms of workers, not just the routine workers that were in the factories that got replaced by software over the last 30 years, but we're gonna see more professional workers who are actually going to be losing their jobs because AI can do those jobs at least as well as they can and far more efficiently. And it's going to have tremendous social and political implications because a lot of those professional workers are used to doing fairly well. This isn't the working class anymore. We're now talking about the middle class of America.

And AI could very easily be taking over many of those jobs.

Speaker 1: To say that everybody benefits has never been true in economic history or economic change. There will be actually significant parts of society that will fall behind. Major technological changes, and they don't happen all that often. The steam engine was 1, electrification was another. The winners win more than the losers lose.

So net, net, big gain. Even in the last 40 years, 50 years, the nature of technological change has favored those with more advanced educations, higher degrees, technical educations, and so on. This has been a clear trend for the last 50 years. That means a lot of people have been left behind in the United States. Heads of AI who are billionaires are libertarians.

They say, oh, leave everything alone, leave it to us. Well, that's easy if you're a billionaire, but it's not so easy if you've lost your job. In this sense, I think that we really need to have a fair assessment of this great potential technology to make sure that it works for society broadly.

Speaker 4: Artificial intelligence, machine learning, robotic automation can affect the way they're using labor. AI is going to have major disruptive effects. Some firms are going to survive, some of them will disappear. Entire sectors of the economy will be radically changed by AI. There's also the risk that AI is going to increase income and wealth inequality.

These technologies are capital intensive, skill biased and labor saving. If you own the machines or the capital that owns the machines, you do well. If you're in the top 10 percent distribution of skills, education, human capital, Probably AI makes you more productive and efficient, but if you are a low or medium value added worker, your jobs and income could, could over time be at risk. 1 view says that there'll be tons of new jobs of the future that we don't even know of, so there'll be always a demand for labor. The other 1 is more dystopian and worries that eventually many jobs, initially cognitive, white-collar jobs that are low-value added, then blue-collar jobs, eventually cognitive and creative jobs could be, you know, at risk.

Of course, if the economic pie is larger, because you have higher potential growth and productivity growth, you can always tax those who are better off, those that are winners, and then redistribute income to those who are left behind.

Speaker 1: It's going to change jobs. A lot of people are going to find that the jobs that they've been remunerated for in the past are not going to be the jobs in the future. The returns to owning AI, to owning the intellectual property, will soar. And that's why we have new trillion-dollar companies. But for a lot of Americans, it actually means lower real earnings, not higher real earnings, because it means a shift of the income distribution.

And we need to understand all of this better so that we can actually make public policies that say, oh, AI is a great thing, but this part of society is going to need help. This part of society is going to be so incredibly rich that they actually should pay some more taxes.

Speaker 5: This topic of AI is really fever pitch now in all the areas that I inhabit as my work, as an investor, as an economist, as a board member, as a public policy person. I think it's a longer game than perhaps people are thinking about, but at the micro level it could have a meaningful impact, not just on business models and how companies constitute themselves and think about allocating resources like capital and labor, but also I think it could be incredibly transformative for the role of state. If indeed we end up with a lot more people who are out of work, which some estimates assume that that might be the case. We might see a new rope of state and obviously a real challenge to what the role of corporations is, given that on the 2019 Business Roundtable, a pledge to revamp the role of corporations, not just think about financial shareholders, but to think about stakeholders broadly. So in a world where more people are out of work, we have to think about how society is growing.

In this laborless growth model, there's a lot more questions that will emerge around AI. And of course, I have not even talked about the risks to the downside. My thesis is that we're going to see a much closer relationship between the public sector, including the third sector, the NGO sector, and corporations. At least that's what we would hope to see. Because I think ultimately, we all should be pulling together to have better outcomes for economic growth but better outcomes for society.

Speaker 0: AI has potential for really changing a lot of business practices. It's coming on very rapidly. Businesses are already aggressively investing in these new technologies. History is a guide. It does take time for those technologies to be incorporated into business practices and have a big impact.

We tend to see the technology, we can see it, we can feel it, we can taste it, we know it's coming, therefore it should happen immediately. It doesn't happen that way generally. It happens over periods of several years, even a couple decades. But I think all businesses will benefit and also be challenged by artificial intelligence. And of course, the benefit is productivity gains.

I mean, businesses are scrambling to try to figure out how to raise the productivity of their labor force. They know that it's gonna be hard to find workers in the future given demographic trends, aging out of the workforce by boomers and weaker immigration.

Speaker 2: General-purpose technologies, which include new forms of energy, even includes like mass production, includes nanotechnology, these have often influenced new changes in production and distribution and consumption, right? So it means a new technology, a new technological revolution that impacts the whole economy, not just 1 little gadget or something. Even Google's algorithm was financed from the National Science Foundation, the internet was financed by DARPA, GPS was financed by the Navy. The big questions we're asking today around AI, but even just big tech in general, in terms of privacy, how our data is being used, do we know how it's being used, the GPT now 5.0 or whatever, we're coming to, there's so many design challenges. How can we make sure these algorithms take into account issues that we know we care about?

Just look at the Human Rights Declaration, right? There's a lot of good information there, but also the Sustainable Development Goals. These are all important in terms of defining What kind of planet do we want to be living on? What kind of growth do we care about? Is it just growth for growth's sake?

Or is it inclusive and sustainable growth? So there's real design challenges, especially today where a lot of the talent that used to be distributed is in 4 or 5 companies around artificial intelligence. So there's profits being earned in excess of the underlying innovation. That has then affected massive, what I call, rents, which are used then to hire in some of the top workers, labor, to work for the companies. Much of this, if you look at AI, used to be in universities, places like Stanford, MIT.

It's now much more profitable for top academics to be doing artificial intelligence research for the big 4 or 5 companies in this space and not in universities or even not in DARPA. What I think is healthy would be if that talent pool was distributed.

Speaker 3: You

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Who Will Be AI’s Winners And Losers | The Bottom Line