AI and automation will increase general well-being only if we apply the right policies

AI and automation are surpassing human capabilities by leaps and bounds and surprising us in areas to which we thought they did not have access, such as art or personal care.. It is evident that technology is reaching new stages. Leaving aside long-term dystopias, what employment impact can we expect from these advances and how can we prepare?

The fact that technical innovations eliminate jobs does not imply that they reduce their aggregate volume since, simultaneously, they facilitate the creation of new ones.. There is no historical correlation between technical progress and aggregate job loss. However, as with international trade, technical progress produces winners (consumers and innovative companies) and losers (companies that do not adapt and workers whose skills are devalued).. Overall, the net effect is positive and, therefore, it would be possible to compensate the losers by redistributing a part of the benefits obtained by the winners.. However, this type of compensation is not usually implemented, which explains why – despite increasing global wealth – technical progress and international opening raise fears and encourage populism contrary to their advances..

Although technical advances are usually specific to specific industries, a common characteristic of AI and robotization is that they are all-purpose technologies, that is, they allow increasing productivity in almost all activities.. Hence its great expected impact, which will not mean so much the complete disappearance of jobs, but rather the elimination of a good portion of the tasks carried out in each of the existing positions.. Thus, according to the consulting firm McKinsey, 30% of the tasks corresponding to 60% of occupations worldwide could already be automated with the technologies currently available.. All in all, it is estimated that more than 8% of the jobs that exist today in Spain will have disappeared by 2030..

From a regional and national point of view, the impact of these technological advances will depend on the speed with which we prepare and adapt.. If we do it relatively quickly, our companies will gain markets with respect to their competitors and salaries will grow more than in neighboring countries.. If we wait to see the cracks in the walls before reacting, our companies and workers will suffer to maintain income.

At the moment, various indicators place us in an intermediate position within the EU. For example, according to Eurostat, the percentage of companies that use AI in Spain is 7.7%; only slightly lower than the EU (7.9%), as shown in the graph. However, this apparently comfortable position in some indicators should not mislead us.. It is essential to implement substantive policies in multiple areas. I will mention three in which it would be very negative to neglect.

First of all, it is crucial to advance training. And this at three levels: at school, at the university and during professional life.. At school, STEM (science, technology, engineering and mathematics) skills must be improved and young people introduced to the rudiments of digital technologies in order to, on the one hand, lay the foundations for deeper learning in stages later and, on the other hand, enable an informed and critical vision of the environment that surrounds them. Sometimes humanistic training is contrasted with the need to provide young people with technical knowledge about programming and new technologies..

This contrast makes no sense since our young people will only be able to confidently face the social, political and informational challenges (fake news, etc.) of the coming decades if they have a basic knowledge of, for example, how the data stored in their devices is processed. mobile phones to identify their inclinations, increase their consumption and manipulate their interpretations of what is happening around them. At the university, it is necessary to increase the offer of studies related to new technologies and introduce these contents in the rest of the degrees, since they will be tools commonly used by all professions (note that two of the areas in which a greatest increase in productivity as a consequence of AI are health and law).

The main obstacle to this evolution will be the enormous inertia and bureaucracy that characterize the Spanish public university.. Both the central and regional administrations have the capacity and responsibility to establish incentives and make decisions to break these inertias.. Regarding training during professional life, the periodic updating of knowledge will be key, both at the initiative of companies – which must increase their investment in human capital – and of the workers themselves..

A second area that requires decisive actions is that of institutional improvement. It is necessary to modernize the Public Administration, reorganize the Autonomous State and increase the efficiency and equity of the tax system, among other issues.. For example, regarding this last issue, before considering the establishment of taxes on robots – as some have proposed, in order to slow down their introduction – it is advisable to reduce the excessive relative tax burden borne by labor income, including security. social, which arbitrarily makes the use of the labor factor more expensive.

This will require shifting more load to other sources.. Unfortunately, the necessary reflection on how to distribute tax burdens has been replaced by downward tax competition without further criteria and there is hardly any public debate on the need to continue modernizing the country.. After the democratic transition and the economic reforms that accompanied it, most of the subsequent institutional transformations have been carried out reluctantly and forced by the European Union. Without pressure from the EU we would not have, for example, a National Markets and Competition Commission (CNMC) independent of the government, nor an Independent Fiscal Responsibility Authority (AIReF), nor a Transparency Law.

Third, it is foreseeable that new technologies will lead to a concentration of benefits and greater wage polarization. It is in the interest of coexistence and collective well-being to offset this trend, for which it is necessary to strengthen redistributive instruments and social guarantees..

In short, AI and automation offer extraordinary opportunities to improve our well-being, but they require decisive action on multiple factors whose reform may take time to bear fruit.. Meanwhile, the world moves inexorably. It's not about being the first, but it is about avoiding being left behind..

*Francisco Alcalá is a research professor at IVIE (Valencian Institute of Economic Research). He has been a professor of Economic Analysis at the University of Murcia until 2020