The rise of artificial intelligence (AI) has undoubtedly disrupted various industries and has the potential to reshape our society in profound ways. AI refers to the ability of machines or computer-controlled systems to perform tasks that typically require human intelligence. While AI offers tremendous benefits and opportunities, it also presents challenges and concerns that need to be addressed. In this article, we will explore the disruptive nature of AI, its impact on jobs and the economy, and the importance of adapting to this technological revolution.
Disruption in Business Models and Processes
Like previous technological revolutions, AI is expected to disrupt business models and processes. It has the potential to automate repetitive tasks, streamline operations, and improve efficiency. This can lead to significant cost savings for organizations and fundamentally change the way businesses operate. Companies that fail to embrace AI may struggle to remain competitive in the evolving landscape.
Displacement of Jobs
One of the key concerns surrounding AI is the potential displacement of jobs. As AI technologies advance, certain job categories and occupations may become obsolete, requiring workers to find new ways to stay economically relevant. What sets this disruption apart is that even skilled and well-educated workers, who traditionally had high barriers to entry, may be affected. The impact of AI is not limited to low-skilled or routine tasks but extends to more complex roles.
AI will not only affect the economy horizontally but also vertically, touching every level to some degree. No worker or firm will be exempt from its influence.
Demand for New Jobs
While new jobs will emerge, they are likely to be niche with high entry barriers. However, there will continue to be a demand for “high touch” jobs such as manual work, professions requiring hands-on skills from plumbing to engineering, healthcare, social services, and senior leadership roles to maintain the “human in the loop.”
The jobs that remain in demand will be repriced in the market to attract a premium. So, these historically lower-end anchored incomes will become “unmoored” and migrate up the income ladder.
Returns on education will actually fall as the payoffs from every added year of higher education in most subjects/fields diminish due to AI ascendancy.
Productivity will be significantly boosted as deployment of AI cuts structural costs and improves outcomes. But the margins are going to be narrowly captured.
This will mean that capital owners will get even wealthier while many workers are displaced and the wage bargaining power of most others reduced.
Inequality will thus become acute. And consequently, State redistribution and investment in public infrastructure ever more important. This will mean radical structural changes to fiscal and social systems.
Singapore has no choice but to run fast to be at the “bleeding edge” of the AI revolution. Using its nimbleness as an advantage it can widen the competitive gap with regional peers. They will also find it harder to ride this wave given their size and weaker infrastructure. The initial margin can thus become entrenched as capital owners back policy direction, industry conviction and economic momentum.
Finally, the revolution is already happening and will continue to pick up momentum quickly. It will move faster than policies, regulations and even politics.
This should be the occasion for many workers to pause and think about their exposure to AI and to rethink, if necessary, their career choices and direction in order either invest in new skills or to change course into more resilient occupations.
Change will come and it has our names written all over it.
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