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Is Covid-19 accelerating automation? Lessons for the advent of AI

Firms are using more and more AI in order to substitute for workers, because the lockdown is making the labor supply even harder for firms

Published: Jul 7, 2020 10:32:03 AM IST
Updated: Jul 7, 2020 10:53:30 AM IST

Is Covid-19 accelerating automation? Lessons for the advent of AIImage: Shutterstock

Long before the coronavirus pandemic, advances in artificial intelligence (AI) were already causing unprecedented changes in work and business around the world. Now, some scholars are drawing new lessons from today’s crisis that may further impact the trajectory of AI’s influence on our lives.

Darden Professor Anton Korinek, an authority on the economic implications of advanced AI, believes the current pandemic is accelerating the changes already underway, in which AI is automating human work. “COVID-19 has spurred a massive technological transition into the virtual world, putting large digital firms at an increasing advantage,” says Korinek. “In addition, the pandemic has caused massive unemployment, which led to unprecedented government interventions to support the jobless.”

According to Korinek, it is critically important that we understand the forces at work and learn from the current crisis about the looming digital disruption. To explore this further, Korinek recently co-hosted a webinar, COVID-19 and the Economics of AI, with Allan Dafoe, the director of the Centre for the Governance of AI based at the Future of Humanity Institute at the University of Oxford in the U.K.

Panelists included three of the world’s top thinkers on the economics of AI: Daron Acemoğlu from the Massachusetts Institute of Technology, Diane Coyle from the University of Cambridge, and Nobel Prize winner Joseph Stiglitz from Columbia University. What follows is excerpted from their discussion, which was moderated by Korinek:

Korinek: What can we learn from COVID-19 about a future that is increasingly digital? What lessons have you learned from the pandemic that we can carry over to the governance of AI?
Acemoğlu: We are living through a transformative moment and this is true for many dimensions of our lives, but two that are particularly important are the future of technology, especially related to AI, and the future of institutions. Both because the current state of institutions is shaping how we react to the crisis and this is a window for potentially transformative changes for the future.

The COVID-19 crisis has created what Jim Robinson and I have called a “critical juncture.” There will be changes in institutions because their inadequacy has been laid bare …. The current crisis has highlighted that we need new responsibilities for the state — combating inequality, climate change, pandemics, better regulation.

[As for AI] firms are using more and more AI in order to substitute for workers, because the lockdown is making the labor supply even harder for firms, and the demand for machines is increasing exponentially.

I have argued in a lot of my work … that the path of technology is not preordained. It is firms’, workers’ and scientists’ choices — and especially regulators’ choices — in redirecting technology, and in this instance AI technology, that is going to play a critical role.

The companies that can operate AI at scale are being strengthened by the crisis, and they’re going to emerge even more powerful …. Before the crisis, a number of countries around the world were recommending tougher competition and regulatory policies toward big tech. Now big tech is getting even bigger. This is a moment for governments to hold their nerve, as our society is dependent on digital companies as never before. And that means that they need to be held accountable for the market power and also political power that they hold. We need a lot more thought about the governance of AI.

Stiglitz: AI is a major structural change in the economy. One of the things that we’ve seen over a long period of time, and that is going to be exacerbated by the pandemic, is that markets don’t handle these kinds of structural changes well, and it inevitably requires government assistance to manage that.

This pandemic has emphasized the virtues of robots. Robots don’t get the coronavirus and … don’t need to be socially distanced. And all of this adds to the shadow price of labor. It makes labor less attractive relative to capital.

As Diane said, the restructuring of the economy has advantaged large digital firms, firms which have large elements of monopoly power .... The problem of the lack of competition in this key sector is getting worse as a result of the crisis. So, too, will the problems of inequality, which are linked to this monopoly power.

In the medium term, we shouldn’t have a problem there, but our politics may lead us to have one: We will need massive investments for the green transition; there are gaps left by underinvestment in the last 20 years in our infrastructure. These gaps should necessitate more job creation than we will be losing. But that will require government revenue, and that’s the question — will we have the political will to make these investments?

In the longer term, we should be able to use our tax system and intellectual property rights system to ensure the benefits are shared by all. This is particularly important in light of COVID-19, which can be viewed as a large negative technology shock …. The choices we make now will have long-lasting effects.

Korinek: What have you learned that gave you a new perspective on how our economy and our society can adapt to large shocks? And how should this inform how we react to the prospect of ever more automation?
Acemoğlu: One of the questions is: Do we need broad institutions that protect us in terms of inequality, public safety and democracy, or do we need technology-specific institutions? … Broad institutions are the first line of defense, but we need technology-specific governance structures and data is one of them, and AI is another, both because of its ability to change the political discourse, to transform privacy and political activism by individuals, and also because of its labor market effects. I think replacing labor with machines [is] productivity enhancing, but it also has external effects because it damages the very fabric of society. It has to be balanced out with other social objectives.

Stiglitz: I agree that the key is creating institutions. I’m optimistic that we can create them, but the question is why isn’t there trust in our institutions? … Well, that goes back to the word power or inequality in our society. If we think that Facebook is going to write the rules, we’re not going to feel comfortable with the rules that come out. And if we think our society has a lot of inequality, which it does, and that we have a political system where that economic inequality translates into political inequality, then we’re not going to trust the institutions that emerge out of the political process …. That’s why we have to begin by dealing with the underlying problems of inequality, the problems of ensuring that we have competition, and of course, that’s interactive. How do we do that without good institutions?

Coyle: The thing that struck me is the way that people sit in intellectual silos, even in the face of a major crisis like this …. This really highlights to me the importance of thinking about ways to integrate social science and different strands of science, because the problems that we’re facing — be it the COVID pandemic or climate change or geopolitical disruption — these don’t fit into narrow silos.

Korinek: Are you willing to leave us with parting thoughts on what we can learn from the pandemic for the future of governing AI?
Acemoğlu: The ability of most Western societies to actually respond to the crisis with large stimulus packages and a general agreement within society that you have to deal with this problem both at the level of containing the virus and health care systems being bolstered … are hopeful signs that when push comes to shove, there will be some agreement on key issues.

Coyle: People are ready for a different kind of system. They’re aware of the many inequalities that have been exposed and exacerbated by this crisis …. My concern is that we have already recently let a good crisis go to waste in 2008. We did far less than I expected coming out of that. All of us who are engaged in this debate really need to make sure we grab that opportunity now.

Stiglitz: We need a better balance of the market and the state. We put too much on the view that markets will solve all problems, and we didn’t realize that you need to have regulations, public investment in science, good institutions, trust in experts, and you need to build up trust in these institutions rather than bring them down. You won’t be able to get that unless you have societies with more solidarity, and that kind of solidarity will only be achieved if we get a society with more shared prosperity, more equality. So that agenda of equality is both the object of what we’re trying to get, but also a necessary condition to get the kind of society that we want.

[This article has been reproduced with permission from University Of Virginia's Darden School Of Business. This piece originally appeared on Darden Ideas to Action.]