A Bot-Powered Productivity Boom? You Can Bet The House On It
Artificial Intelligence & Machine Learning
The economy is changing. Last week, IMF economists announced that we were on the precipice of an economic shakeup the likes of which the world has never seen. Over the next ten years, the organization claimed that output would quadruple, even as human labor inputs went to zero.
That anyone could make this statement and get their story published in the mainstream news media is astonishing. But the fact that the IMF is making these claims is even more incredible. The conservative international organization obsessed with dull forecasts and even duller economic policies is now suggesting that we could see more growth in the next ten years than over the last 100.
What could possibly be driving these predictions? You guessed it – AI. In 2014, Oxford University economists suggested automation could wipe out 45% of human jobs by 2035, putting pressure on entrepreneurs to come up with new activities to occupy workers’ time. But now the IMF is upping the ante, suggesting that we might have as little as five years to figure out what to do with idle humans, while robots shoot the economy to infinity.
“We are already seeing these changes occurring,” says Apryse.
“ChatGPT is streamlining workflows at an incredible rate, doing things in seconds that once took skilled professionals hours. Just look at how it is transforming document processing, something we recently discussed in a blog. You can now upload images of PDFs and other file formats to ChatGPT and it’ll tell you anything you want to know about them. Lawyers can literally photograph statutes with their iPhones and quiz the tool about the contents and what it sees for quick answers.”
It’s these types of changes that are driving serious consideration of the AI revolution. But the fact that the IMF is now taking it seriously – an organization that typically views the world in linear, not exponential, terms – is weird. Is the singularity mainstream now?
Why Are Bots Driving A Productivity Boom?
Bots are driving the current productivity boom with the ChatGPT document analysis feature. That might explain why the U.S. economy grew so rapidly in 2023, despite all the headwinds. But what the IMF is talking about is much more dramatic than a headline 5.2% quarterly GDP growth. Its figures suggest we might be looking down the barrel of 50% growth per year, or possibly more.
To be fair to the international research and finance organization, its latest report did include several projections of what an AI-powered future might look like. The first scenario is a kind of semi-hard take-off, where machines replace much of human labor over the next five years. The other is a slightly longer ten-year horizon where things change a little more gradually. However, both scenarios predict unfathomable growth rates that seem impossible from today’s perspective.
With that said, the authors of the research believe that it will happen, even under their most conservative assumptions. The economic case for automating the economy is exceptionally strong, and companies will engage in fierce competition to use AI tools to bring costs down. Work by humans will become a thing of the past as machines do everything faster and more cheaply, even if the energy cost is higher.
The scope of AI to transform the economy, the authors believe, is fundamentally unlimited. Artificial minds can replicate a fundamental quantity in human civilization: intelligence. Their message is that if our minds can enable us to do something, machines can also do it.
As such, AI will seep into everything, just as electricity did over the 20th century. It will become a part of the fabric of our reality, imbuing everything with its ability to analyze and evaluate. Just as a human can work a line in a factory or replenish shelves in a store, machines will also be able to do that.
However, it could go beyond merely replicating human labor. AI could also radically enhance current approaches, transforming total factor productivity, and enabling more output overall, even given finite resources. For example, machines could develop new techniques to extract minerals at lower energy costs or develop improved business models that can serve more people without requiring as many resources.
How Far Will The Bot Boom Go?
The striking reality has many wondering how far the bot boom will go. Some analysts predict the hype will fizzle out, as it has done many times before, or that we should be seeing rapid growth in productivity statistics already. However, that no longer seems like the conservative mainstream view. The consensus now appears to be that these new AI tools will transform practically every sector, first augmenting labor, and then completely eliminating it.
That’s what the IMF suggested in its report. It sees wages for human workers spiking over the coming five years as people make better use of machines at the margins to work better and faster. However, eventually, humans will cease providing any value in the equation and automation will take over completely, eliminating the need for firms to hire people.
In essence, this means the IMF is suggesting that the AI boom could go all the way. Systems could run the entire economy and make adjustments and improvements along the way. Output could grow 300% over the next decade, and we could see dramatic innovations, such as advanced new technologies that enable near-unlimited expansion in the solar system.
Again, these changes seem far-fetched. It is hard to believe that the Western world could drag itself out of its current malaise and enter a golden age, let alone grow the economy more in ten years than in a hundred. But, as futurists like to remind us, that’s all because of linear thinking. If the IMF’s predictions are right, the ramp-up will be slow at first, but then productivity and output benefits of AI tools will grow exponentially as they become ever-more capable and understand our needs.
“We’re incredibly excited about the future,” Apryse says. “It seems as if bots will finally eliminate drudgery and, perhaps, a good chunk of human suffering.”
