Will revolutionary artificial intelligence kill growth in developing world?

I have spent my career in international development, and in recent years have established a research group at Oxford University looking at the impact of disruptive technologies on developing economies.

Perhaps the most important question we have looked at is whether Artificial Intelligence (AI) will pose a threat - or provide new opportunities - for developing regions such as Africa.

Optimists say such places could use rapidly advancing AI systems to boost productivity and leapfrog ahead.

But I am becoming increasingly concerned that AI will, in fact, block the traditional growth path by replacing low-wage jobs with robots.

AI is potentially the most revolutionary technology to emerge this century. It is also, along with the associated technologies of machine learning and robotics, advancing at breakneck speed.

Already AI has the capacity to replace many work tasks that are rules-based and repetitive, and which do not require great dexterity or empathy.

In developed economies, for instance, robots have replaced well over half of the jobs in the car and related industries in recent decades.

Automated systems are already getting higher customer satisfaction ratings than people in call centres, threatening a key source of jobs in many countries.

Similarly, AI enabled systems are leading to significant job losses in back-office administrative functions. These are roles that had in recent years been outsourced to developing countries such as India, Vietnam, South Africa and Morocco.

Some argue that AI will create as many new jobs as those lost to robots, and that we shouldn’t worry too much. But I believe that those new jobs will be concentrated in certain parts of the developed world, and that the developing world will miss out.

This matters most acutely in poorer nations that have used their relatively low-cost labour force as a first stage in catching up with the developed economies, examples being China, Thailand and Vietnam.

Most of the jobs at threat in such places would be of the semi-skilled variety. But the fact that poor countries also tend to suffer shortages of highly skilled labour could further undermine their competitiveness.

The development of supplementary technologies will add to the challenge. 3D printing, will combine with AI to allow consumers in rich countries to manufacture individually customised clothes, shoes, devices and other products, by themselves, much closer to home.

More power

The rise of such production could mean the age of outsourcing production to developing countries is drawing to a close.

As technology plays an increasingly dominant role in the global economy, parts of the planet driving technological development stand to gain even more power. Just look at the concentration of wealth and incomes we have seen in places such as Silicon Valley.

This trend could be replicated globally, worsening inequality.

The tech industry also sucks up talent from around the globe, leaving shortages of human capital in some countries.

Is all lost? Perhaps not. New firms are emerging that aim to use AI to boost growth and productivity in developing economies. They are also allowing citizens to access education, health, employment and other opportunities.

One such is M-Pesa, a mobile phone-based money transfer service, whose platform is used by more than 60 per cent of Kenyans. M-Tiba, another Kenyan app, uses similar technology to deliver health services to more than four million people.

- Ian Goldin is professor of globalisation and development at Oxford University. [Courtesy BBC]