The United Nations Conference on Trade and Development (UNCTAD) has issued a clarion call. They are sounding warning bells about the catastrophic impact AI might have on the world economy down the line. The AI market cap is expected to grow to $4.8 trillion by 2033 — the size of Germany’s entire economy. This growth, though it delivers the promise of productivity gains and fuels digital transformation, exacerbates economic inequality and accelerates job displacement.
One of the most interesting things these findings showcase is that the benefits of AI are not equally shared. The economic benefits of AI are heavily skewed among a very small number of firms. Companies located in the United States and China account for most of this activity, together comprising an estimated 40% share of global corporate research and development spending on AI. This extreme concentration of wealth and resources presents a clear and present danger of exacerbating the divide between countries even more.
AI’s Impact on Jobs and Unemployment
According to new statistics, 41% of employers intend to reduce the number of employees. They’re going after jobs that are low-hanging fruit for AI. This worrisome trend would mean AI has the potential to threaten up to 40% of jobs across the globe. The alternative is deeper unemployment and growing socioeconomic divides.
More than a year ago, the IMF was cautioning us to consider the likelihood of AI exacerbating job displacement and inequality these days. This alert reflects a developing consensus amongst the international organizations about the harmful impact AI technology poses. UNCTAD cautions that tech is not inherently inclusive. Shockingly, 118 countries, primarily from the Global South, are absent from important conversations about the future of AI governance.
UNCTAD has repeatedly called on the international community not to lose sight of the need to drive inclusive growth. Further, it pushes back against the notion that only some countries should “have a seat at the table.” This is especially important for helping to inform AI regulatory and ethical frameworks.
“AI can be a catalyst for progress, innovation, and shared prosperity – but only if countries actively shape its trajectory.” – UNCTAD
As countries struggle with the realities of incredible, technology-driven change, one thing is certain: just waiting around isn’t going to cut it. The uneven distribution of AI benefits threatens to exacerbate existing inequalities unless deliberate efforts are made to include diverse voices in shaping policies that govern this transformative technology.
What The Author Thinks
AI’s growing influence on the global economy presents both significant opportunities and risks, particularly in terms of exacerbating inequality. Without concerted efforts to ensure the inclusive distribution of its benefits, the technology could deepen the divide between nations and contribute to widespread job displacement. Governments and international organizations must take immediate steps to ensure that AI is regulated ethically and that all voices, especially those from underrepresented regions, are included in these crucial discussions.
Featured image credit: Freepik
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