'The Era of Great Growth is Over': Nobel Disassembles Promises about Artificial Intelligence
Artificial intelligence
is often referred to as the technology destined to
bounce back the productivity of Western economies after years of weak growth. However,
Christopher Pissarides, Nobel Prize in Economics in 2010 and one of the leading experts on the effects of automation on the labor market, urges to
downgrade these expectations.
In an interview with
Bloomberg and during a conference organized by the Royal Economic Society in Newcastle, the economist from the London School of Economics argued that, at present,
there is no evidence to suggest that a new cycle of productivity growth comparable to that generated by the spread of personal computers in the 1980s and 1990s will happen.
According to Pissarides, a significant share of employment in Western countries will remain largely unaffected by artificial intelligence. Activities such as nursing, hospitality, and many professions with a high relational component will continue to rely predominantly on human labor.
"Up to 40% of jobs in the UK, or a very high share,
are not exposed to artificial intelligence and therefore will not benefit from productivity increases thanks to AI," stated the economist.
His analysis diverges from forecasts made by various tech industry leaders. In recent years, figures such as Jensen Huang, CEO of NVIDIA, and Sam Altman, CEO of OpenAI, have described artificial intelligence as a technology destined to profoundly transform work and generate a significant increase in economic productivity.
Pissarides does not rule out that AI can produce tangible benefits, but he finds it
unlikely that these advantages will reach the scale of previous computer revolutions.
"I doubt we will witness a new computer boom equivalent to what we experienced in the 1980s and 1990s," he said. "For what we know today and what we observe,
I do not see productivity growth capable of reaching those levels," while emphasizing that there remains an inevitable degree of uncertainty regarding the future evolution of technology.
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According to the Nobel laureate, for the more optimistic estimates to materialize, exceptionally high productivity increases would need to be registered in the sectors most exposed to artificial intelligence, such as the financial sector. A scenario that, in his opinion, seems unrealistic.
"It's simply not practical to talk about strong productivity growth. I believe we should
come to terms with the fact that the days of rapid productivity growth are over, whatever we do," he stated during his speech.
The debate, however, remains open even among decision-makers in economic policies. The governor of the Bank of England, Andrew Bailey, continues to regard artificial intelligence as a technology that could potentially deeply alter growth prospects.
While acknowledging that the effects will take time to reflect in macroeconomic data, Bailey recently noted that AI "could really come to our rescue," highlighting how the potential of technology is still subject to different assessments among economists, institutions, and industry.