In the latest New York Times feature, “AI Will Transform the Global Economy, If Humans Let It,” OxValue.AI’s founder, Prof. Xiaolan Fu joined Reid Hoffman (Co-founder of LinkedIn), Marc Benioff (CEO at Salesforce) and Richard Baldwin (Prof. at IMD Business School), to discuss the transformative potential of AI. The full coverage can be accessed on the link: A.I. Will Transform the Global Economy – The New York Times

Xiaolan Fu: The Integration of A.I. With Human Knowledge Will Fuel Economic Growth

Artificial intelligence is steering a new industrial revolution. Its profound impacts are set to permeate every facet of the economy and society, ushering in a series of transformative changes. I see several important ways A.I. will reshape the global economy in the years ahead.

First, A.I. is driving the restructuring of global value chains, leading to the relocation of resources for enhanced efficiency. This restructuring includes the resurgence of manufacturing in North America and Europe and the automation of labor-intensive services like accounting, legal support and customer service. A.I. optimizes supply chain visibility, predicts demand fluctuations and streamlines logistics, promoting bespoke services and precision marketing to cater to individualized consumer needs efficiently.

A.I. advancement is fueling the growth of startups and fostering “A.I.+” innovation across diverse industries and on large language model platforms such as GPT. By leveraging A.I. technologies, businesses can evaluate and enhance the value of technology-driven startups, facilitating innovation in small and medium enterprises and supporting technology transfer to developing nations.

China’s rapid development in A.I. has positioned the country as a key player in the global A.I. landscape. Backed by substantial government support, abundant data resources and a vibrant innovation ecosystem, China is on the path to becoming a global A.I. powerhouse. China boasts a flourishing A.I. startup ecosystem, buoyed by significant venture capital investments.

But A.I.’s impact on global inequality is a double-edged sword. While it drives economic growth, expands service accessibility and creates new opportunities, unchecked deployment can exacerbate existing economic, regional and social disparities. To ensure inclusive A.I. benefits, stakeholders must tackle issues such as A.I. bias, unequal technology access and skill gaps through inclusive development and utilization of A.I.

Lastly, human involvement remains crucial in guiding and managing A.I. technologies. As A.I. progresses at a rapid pace, robust governance frameworks are essential to ensure equitable and sensible distribution of A.I. benefits in the global economy. Innovations that harmoniously blend A.I. with human insight and elevate human needs and values are pivotal for sustainable technological advancements.

A.I. will change industry structure and economic geography. We will see changes to the landscape of comparative advantage among countries and new global divisions of specialization. A.I. will also lead to transformations in labor markets and increased innovations in the digital sector. Technology capability will be increasingly concentrated in a few countries, and the technological gap between leading and developing countries will grow. There is a real risk of technology decoupling due to the competition in A.I. and other key technologies between leading countries.

The future trajectory of the global economy hinges on seamlessly integrating A.I. with human wisdom. Technological advancements that prioritize human-centric design and uphold human values are poised to drive inclusive growth and propel sustainable development in the global economy.
(Photo Credit: Fisher Studio)