**: CBN.
New AI technologies that fuel growth and human well-being are also potentially disruptive.
A few days ago, after returning from the World Economic Forum in Davos, I was asked many times what the big takeaways were. Artificial intelligence – especially generative AI – was the most talked about this year. With the recent adoption of large language models (such as those that drive ChatGPT), there is great hope and unrealistic confidence in the future impact of AI on productivity and economic growth.
To answer this question, we must remember that it is more human stupidity than artificial intelligence that dominates our world. Enormous threats are spreading, each one being one of the elements of a larger "multiple crisis," confirming that our political system is too dysfunctional and our policies too misguided to address even the most serious and obvious dangers ahead. These include climate change, which will have huge economic costs, failures that will exacerbate climate migration flows**, and the recurrence of pandemics that could be even more economically devastating than the pandemic.
To make matters worse, dangerous geopolitical confrontations are becoming increasingly serious, such as the Russia-Ukraine conflict and the Middle East crisis. Around the world, rising income and wealth inequality, driven in part by hyper-globalization and labor-saving technologies, has sparked a pushback against liberal democracies, creating opportunities for populism,** and violent political movements.
Unsustainable levels of private and public debt threaten to trigger debt and financial crises, and we risk a return to inflation and stagflationary shocks due to shrinking aggregate supply. Protectionism, de-globalization, decoupling and de-dollarization are the megatrends of the global future.
In addition, the potential for disruption of new AI technologies that fuel growth and human well-being is enormous. They have been used to fuel disinformation, deepfakes, and election rigging, and have raised fears of permanent technological unemployment and worse. Equally ominous is the rise of autonomous** and AI-enhanced cyberwarfare.
Davos attendees were blinded by the dazzling aura of artificial intelligence and did not pay attention to the most important threats mentioned above. It's not worth the slightest fuss. Experience has taught me that the zeitgeist of the World Economic Forum often runs counter to where the world is really headed. Decision-makers and business leaders are there to peddle books and exchange clichés. The conventional wisdom they represent often comes from the hindsight of global and macro developments.
So when I warned at the 2006 World Economic Forum that the global financial crisis was imminent, I was dismissed as a doomsayer and ignored. And when I was faced with verbal threats from the Italian finance minister in 2007** when many eurozone members were about to face sovereign debt problems soon. In 2016, when everyone asked me if the collapse of China was a harbinger of a hard landing and would lead to another global financial crisis, I rightly suggested that China would face a bumpy but controlled landing. 2019 In 2021, the hot topic in Davos was the crypto bubble that began to burst in 2022. Then there was a shift in focus to clean and green hydrogen, and the fad is now fading.
AI technology has the potential to truly change the world in the coming decades. But given that the future of AI technologies and industries will go far beyond the limitations of models, the World Economic Forum's focus on generative AI seems to have been misplaced. Take, for example, the ongoing revolution in robotics and automation, which will quickly lead to the development of robots with human-like traits that can learn and multitask just like we do. At the same time, we can also think about what artificial intelligence will bring to biotechnology, medicine, and the ultimate health and longevity of human beings. Also fascinating is the development of quantum computing, which will eventually merge with artificial intelligence to create advanced cryptography and cybersecurity applications.
The same long-term perspective should apply to the climate debate. Increasingly, renewables or expensive technologies such as carbon capture, storage and green hydrogen will not solve the problem (because growth is too slow to make a significant impact). Conversely, if commercial reactors can be built within the next 15 years, we may be witnessing a fusion energy revolution. Such an abundance of cheap, clean energy, coupled with cheap desalination and agricultural technology, will give us the ability to feed the 10 billion people who will live on Earth by the end of the century.
Similarly, the financial services revolution will not have decentralized blockchains or cryptocurrencies at its core. Instead, it will feature AI-powered centralized fintech that is already improving payment systems, lending and credit allocation, insurance underwriting, and asset management processes. Materials science will revolutionize new components, 3D printing manufacturing, nanotechnology and synthetic biology. Space exploration and development will help us save the planet and find ways to create extraplanetary life patterns.
These and many other technologies can make the world a better place, but only if we can curb their negative effects, and if we use them to address all the great threats we face. There is hope that artificial intelligence will one day be able to defeat human stupidity. But if we destroy ourselves first, AI will never have this opportunity.
The author is Professor Emeritus of Economics at New York University's Stern School of Business and Chief Economist and Co-Founder of Atlas Capital