AI Revolution: Which Countries Stand to Benefit?
Artificial intelligence (AI) is poised to revolutionize the global economy, but the question remains: which nations will reap the benefits? It’s clear that the United States is at the forefront of this AI-driven revolution, given its advancements in technology and dominance in the industry. However, what about the rest of the world? How will AI impact their economic growth trajectories?
In broad terms, economic activities can be divided into two categories: routine tasks and new projects. AI will favor countries that excel in the latter and pose challenges to those heavily reliant on routine work.
The majority of economic activities fall into the realm of routine tasks, such as bureaucratic processes, medical diagnoses, and back-office work. There is no criticism in this categorization; routinizing activities helps reduce costs and streamline operations. However, AI excels at tasks that are replicable and routine, making it highly likely that AI will master such activities over time. Automation and AI-powered bots are already commonly used for customer service inquiries. While the current capabilities of AI may not be sufficient to replace all routine jobs, advancements in AI are rapidly progressing and will likely continue to do so.
This poses a risk for countries that specialize in routine activities, like India and the Philippines, where call centers and back-office support are prevalent. AI has the potential to eliminate many of these jobs, shifting the associated profits to foreign firms. As AI continues to advance, there is a high probability that it will have a significant impact on economies heavily reliant on replicable activities. However, the precise timing of these transitions remains uncertain. Unfortunately, smaller, economically disadvantaged countries lacking the necessary resources for major projects may struggle to climb the value chain by relying on low-wage routinized activities.
On the other hand, new projects provide a different landscape for AI. Current AI models are far from being capable of conceptualizing new ideas, effectively communicating innovative visions, assembling and inspiring talent, raising capital, or navigating corporate politics. AI cannot substitute the creative force of entrepreneurs in these critical areas. However, AI can undoubtedly facilitate the execution of new projects by assisting with routine tasks along the way.
Countries or regions that excel in executing new projects are, therefore, most likely to benefit from the AI revolution. China emerges as a potential candidate, considering its successful track record in infrastructure development. However, there is a tension between unrestricted commercial AI development and the Chinese government’s censorship policies. The extent to which the Chinese government allows decentralized access to high-quality AI models remains uncertain.
India is another potential winner in this AI-driven transformation despite its vulnerability in back-office support. The country has made remarkable strides in infrastructure development over the past decade, indicating its increased capacity to undertake new projects. The Indian Aadhaar program, which involved biometric scans of over one billion citizens and facilitated secure payments, serves as evidence of India’s ability to execute major initiatives. Although India also faces some censorship challenges, they are not as severe as those in China.
Saudi Arabia is actively planning ambitious projects, including the futuristic city of Neom in the desert. While technological advancements may still be necessary to bring these plans to fruition, Saudi Arabia’s commitment to significant changes positions them as potential winners in the era of AI advancements.
Even countries like Canada or Greenland, which may witness new real estate developments due to changing climate conditions, could benefit from AI technology, potentially with support from the United States. Moreover, the US itself is expected to be a major beneficiary beyond its role as a producer and seller of AI. Whether it’s biomedical advancements or green energy initiatives, the US has shown a newfound ambition in these domains.
In conclusion, as the AI revolution unfolds, nations proficient in executing new projects are likely to thrive. While routine activities may be increasingly automated, the creative force of entrepreneurs remains irreplaceable. China, despite censorship concerns, India with its infrastructure progress, Saudi Arabia with its ambitious plans, and the US with its pioneering spirit are among the contenders vying to harness the potential benefits of AI. Ultimately, the future impact of AI on economic growth trajectories will depend on how countries adapt and leverage this transformative technology.
