Opinion

As nations battle for AI supremacy, what about the cost of creative destruction?

Most governments seem more interested in global AI dominance than managing the cost of disruptive innovation for society

Wise states would make AI’s potential creative destruction a strategic issue, with funding and continuous attention from the highest levels of government

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A Beijing job fair for university graduates on July 24. Disruptive innovations like AI are drivers of sustained economic growth, but they also destroy existing economic actors like specific industries, companies and jobs. Photo: Xinhua

Bert George (BSc, MSc, PhD) is an applied economist and full professor in the Department of Public and International Affairs, City University of Hong Kong.

Published: 1:00am, 4 Aug 2023Updated: 1:55am, 4 Aug 2023

Not a day goes by without a report about how artificial intelligence (AI) will make various jobs redundant. Some people are even boasting about their “AI-proof” jobs: they will never be replaced by a robot – though one should never be too sure about that. Among nations, the battle for AI supremacy is on, and becoming the dominant player has become an objective for most, if not all, superpowers.

Unsurprisingly, investment in AI research and development is skyrocketing across the globe – not only from companies but also from governments and public entities.

We are also seeing more doomsday thinkers who argue that AI could be (even will be) the end of humanity. Apocalyptic visions of a future dominated by AI – one might recall scenes from The Matrix or Terminator films – are seemingly pushed upon society, instilling fear.

As an economist, I tend to shy away from apocalyptic visions, looking instead at how economic theories and concepts can help us better understand AI’s potential impact. One particularly useful concept often overlooked by governments in the AI discussion is creative destruction.