This week in Say More, PS talks with Keun Lee, a former vice chair of the National Economic Advisory Council for the President of South Korea, a former president of the International Schumpeter Society, Distinguished Professor of Economics at Seoul National University, and the author of China’s Technological Leapfrogging and Economic Catch-up: A Schumpeterian Perspective.
Project Syndicate: Fears that generative artificial intelligence will cause mass unemployment in the long term are likely “overblown,” you argue, not least because the technology will probably bring considerable product innovation (which tends to boost overall employment), in addition to process innovation (which has more uncertain employment outcomes). Beyond re-skilling and up-skilling initiatives, what government interventions would support employment, and how can policymakers strike “the right balance of support and discipline” of AI companies?
Keun Lee: Perhaps most important is what governments must not do: impose excessive regulations on new waves of AI-related innovation. Countries that take a more flexible, open-minded approach, leaving plenty of space for experimentation, will benefit from more new ideas and experiences – and gain critical data revealing where regulation is most needed.
At the same time, governments must prepare for significant labor-market changes. As generative AI is applied in ways that boost the productivity of human labor, wages will rise and working hours will fall. The wage premium enjoyed by some white-collar professionals will also decline, leading to a reduction in some types of income inequality. The details, however, will depend significantly on how AI is applied. Labor-market reforms must proceed accordingly.
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