How Will the Importance of Skill Premium Increase in the Future AI Economy?

Tuesday, May 2, 2017

How Will the Importance of Skill Premium Increase in the Future AI Economy?

Artificial Intelligence

A car driving forward on the road with no one on the steering and people declare this to be safer than if there was a human steering that car, is something that might scare a lot of people that humans need not apply but is that really the case?

As this decade progresses forward, artificial intelligence will emerge as an increasingly dominant force in the business and employment sector. A lot has been said about how this new technological disruption will eliminate a high number of jobs and automate tasks which we have always reserved for humans. The recent furor and anxiety over impending automation led mass job displacement definitely has its reasons to exist. People believe they would not be needed and a lot of surveys have certainly signified that a high number of jobs would definitely not require humans but that doesn’t mean that humans would not be required at all.

The future AI economy will definitely enter realms that we don’t even think now, can be automated. AI combined with VR could make learning much more fun and conducive, leading to the elimination of teachers from their role despite the fact that they still have the “Human touch.” Stock brokers will recede behind the scene as AI led tech delivers better and more nuanced results and without motive to manipulate or game the indexes, are just some of the examples of areas where AI could lead us towards a total transformation. In such an era, what will be valued as a skill that AI cannot accomplish and lead a person towards a job?

Skill premium is the difference between wage rates of skilled and unskilled labor. During and after the Industrial Revolution, this gap widened as technology began rewarding those more who could solve more complex problems and lead to better efficiency in the workplace. The more mundane tasks were left to the machines that could do it easily. Humans who were deemed unskilled were those who were competing with machines, despite the fact even a single machine was more efficient and effective than 20 or more of them combined.

The AI economy would raise a similar scenario where those who are competing with machines will definitely be not needed and face unemployment but this time the scenario is more complex because technologies like AI have raised the bar up a notch and invaded the sector of Skilled workers and if something lies beyond that, humans would definitely sit there aloof and more importantly, with a job.

There are not many jobs that might exist beyond the level of what deep learning AI cannot do, but they still do exist and will require an entirely new set of skills to reach and that will be where the new benchmark for the new skill premium difference will find its upper limit.

This new upper limit for the skill premium will lie in the space where humans will be required to have a deep understanding of how humans and AI will interact with each other. This white space is an “Only High skill level” area because no matter how much automation of jobs happen because of Deep learning AI, even Deep Learning will not be able to establish the bridge between humans and AI in this relationship, it will have to be done by humans themselves.

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Deep learning AI might be able to give the best results and decisions but we’ll need humans to decipher those very complicated results and decisions to us humans. The human machine interface is to be designed and made easier and it will be done by humans; designing automation of AI to suit a certain task will be done by humans, controlling AI from going rogue or helping it to stay within a defined safe limit will be done by humans and the humans who do all of this will make up the new set of skilled worker. The rest of the populace will remain the unskilled ones. The meaning of skill will change transcendently and the better we understand this new phenomenon, the more our chances of remaining in the skilled sphere become pronounced.

These high-level skills will allow us to make the world economy better and much more effective. It will help the human race rise and take the next step forward by helping us to remove a lot of obstacles that block us from reaching optimum efficiency. Consider the case of the American Trucking sector which transports nearly 70% of the total freight but is facing a massive driver shortage. Trucking companies are trying out new and better strategies to attract and recruit more drivers but still, the problem is persistent and is unlikely to go away anytime soon. Now consider the case of autonomous cars and trucks, who promise an astonishing $1.3 trillion in savings to the US and $5.6 trillion in savings to the global economy by eliminating exactly these sort of issues and more like savings in insurance costs, fuel savings, and lower downtimes. Despite the scare, the better option for everyone lies in the latter part of the argument.

We need to move on to realize these sort of financial and operating efficiencies at the behest of Deep learning AI and other related technologies while trying to better our own skill set to suit the sort of utopian world we, the humanity, have always tried to create for ourselves.

By  Ronald MccarthyEmbed


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