AI Could Devastate the Developing World (bloomberg.com)

Kai-Fu Lee, Chairman and CEO of Sinovation Ventures and author of “AI Superpowers: China, Silicon Valley and the New World Order,” reports of the devastating impacts artificial intelligence could have on the developing world. An anonymous reader shares the report from Bloomberg: In recent decades, China and India have presented the world with two different models for how such countries can climb the development ladder. In the China model, a nation leverages its large population and low costs to build a base of blue-collar manufacturing. It then steadily works its way up the value chain by producing better and more technology-intensive goods. In the India model, a country combines a large English-speaking population with low costs to become a hub for outsourcing of low-end, white-collar jobs in fields such as business-process outsourcing and software testing. If successful, these relatively low-skilled jobs can be slowly upgraded to more advanced white-collar industries. Both models are based on a country’s cost advantages in the performance of repetitive, non-social and largely uncreative work — whether manual labor in factories or cognitive labor in call centers. Unfortunately for emerging economies, AI thrives at performing precisely this kind of work.

Without a cost incentive to locate in the developing world, corporations will bring many of these functions back to the countries where they’re based. That will leave emerging economies, unable to grasp the bottom rungs of the development ladder, in a dangerous position: The large pool of young and relatively unskilled workers that once formed their greatest comparative advantage will become a liability — a potentially explosive one. Increasing desperation in the developing world will contrast with a massive accumulation of wealth among the AI superpowers. AI runs on data and that dependence leads to a self-perpetuating cycle of consolidation in industries: The more data you have, the better your product. The better your product, the more users you gain. The more users you gain, the more data you have. Lee says the best thing emerging economies can do is to “recognize that the traditional paths to economic development — the China and India models — are no longer viable.” Countries with “less-educated workers” are advised to build up human-centered service industries.

“At the same time, developing countries need to carve out their own niches within the AI landscape,” Lee writes. “… governments need to fund the AI education of their best and brightest students, with the goal of building local companies that employ AI.”

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