AI’s DISRUPTIVE ECONOMIC IMPACT, AN INDIAN CHECK

Recent Developments

There has been rise of Large Language Models and Generative AIs.

Positive aspects of Generative AI

• Various surveys conducted by organizations like MIT, PwC and Goldman Sachs showed the following benefits derived from Generative AI –
• Increasing productivity in producing goods and services.
• AI tools boosted worker productivity by 14% and improved consumer satisfaction.
• It led to better treatment of customer service agents and increased employee retention.
• Increase in global GDP due to ongoing technological advancements in AI.
• Generative AI’s potential to create human-like output and its ability to break down communication barriers between humans and machines could have large positive macroeconomic effects.
• It is also predicted that there will be substantial increase in the growth rates of real capita income in the U.S. and western Europe over the next two decades.
• Generative AI can automate repetitive tasks and even creative tasks can be done efficiently and fast.

Issue with Generative AI

• There are ethical debates regarding the use of generative AIs.
• The biggest issue with Generative AI is still the debate over worker replacement. It is said that employees using generative AI will replace those who do not up skill.
• A ban on generative AI chat bots could negatively impact national innovation.
• Adoption of AI reduces the labour share, employment and wages. It primarily affects blue-collar workers and individuals with lower levels of education.
• Automation also leads to inequality among workers and negative impacts on social welfare.
•  AI can intensify competition and deepen the technological divide among firms.

Steps India should take

• India should –
• Focus on education and training in AI, rather than its regulation.
• Restructure business processes and increase investments to fully leverage AI’s productivity potential.
• Regulate AI processes in a way that it does not drive away new opportunities and investments.
• Invest in online education to take advantage of its demographic dividend.
• Set up cyber regulations to deal with the challenges posed by AI.

Conclusion

Even though currently the gains are not much visible but within the next 5-10 years larger gains are anticipated with the use of Generative AI. If used in an efficient manner automation due to AI can possible create more jobs than it is going to displace. For this nations need to stay updated with the changing employment dynamics.AI has become talk of the day and has touched every aspect of global economy. It is more important to upgrade the skill set today than to wait for changing careers later. Hence, nations should focus on imparting education and training to get equipped with AI to reap its maximum benefits.