Group F

Group Members:

Muhammad Ovais

Khalid Mehmood

Naqeeb Ur Raheem

Khalid Zafar

Course: Research Project

Research Topic:
Artificial Intelligence and its impact on Employment and Economic Growth
Introduction to the study:
Artificial intelligence (AI) or the capacity of machines to make predictions using large amounts
of data to take actions in complex, unstructured environments (Agrawal et al, 2018). The roots of
AI trace back to several decades ago, there is a clear consensus on the paramount importance
featured nowadays by intelligent machines endowed with learning, reasoning and adaptation
capabilities. It is by virtue of these capabilities that AI methods are achieving unprecedented
levels of performance when learning to solve increasingly complex computational tasks, making
them pivotal for the future development of the human society. (D.M. West, 2018).
One of the reasons for the growing role of AI is the tremendous opportunities for economic
development that it presents. A project undertaken by Price Water House Coopers estimated that
“artificial intelligence technologies could increase global GDP by $15.7 trillion, a full 14%, by
2030.” (Nathaniel Popper, 2016). As regards the impact of robots on net employment, evidence
is mixed. Chiacchio et al. (2018) report negative effects—one more robot per thousand workers
reduces the employment rate in six EU countries by 0.16–0.20 percentage points. Yet, Autor et
al. (2015) and Graetz and Michaels (2018) find no effect of automation on aggregate
employment. On German data, Dauth et al. (2017) find no evidence that robots cause total job
losses, but they show a significant negative effect on employment in the manufacturing industry:
each additional robot per thousand workers reduces aggregate manufacturing employment-to-
population ratio by 0.0595 percentage point.

Link between AI, Economy and Employement:

The use of AI machines in the market in applications such as online trading and decision making
has changed major economic theories. (Marwala, Hurwitz, Evan, 2017). AI is increasingly being
used by corporations. Jack Ma has also predicted that AI CEO's are 30 years away. (Pham,
Sherisse, 2017). AI has also reduced fraud and financial crimes by monitoring behavioral
patterns of users for any abnormal changes or anomalies. (Chapman, Lizette, 2019). For financial
statements audit, AI makes continuous audit possible. AI tools could analyze many sets of
different information immediately. Overall audit risk will be reduced, the level of assurance will
be increased and the time duration of audit will be reduced. (Sorensen, Susan M, 2017) In health
care institutions, AI is assisting doctors. According to Bloomberg Technology, Microsoft has
developed AI to help doctors find the right treatments for cancer. Dina Bass (20 September
2016). Whereas, in automobile industry, advancements in AI have contributed to the growth of
the automotive industry through the creation and evolution of self-driving vehicles. As of 2016,
over 30 companies are utilizing AI into the creation of self-driving cars. A few companies
involved with AI include Tesla, Google, and Apple. (CB Insights, 2016).

Problem Statement:
Many analysts are warning that advances in both robotics and AI over the next few decades
could lead to significant job losses or job polarization and hence widen income and wealth
disparities (Korinek and Stiglitz, 2017; Méda, 2016). Some people also consider AI to be a
danger to humanity if it progresses unabated. (Lombardo P, Boehm I, Nairz K (2020). Others
believe that AI, unlike previous technological revolutions, will create a risk of mass
unemployment (Ford, Martin; Colvin, Geoff, 2015). The relationship between automation and
employment is complicated. While automation eliminates old jobs, it also creates new jobs
through micro-economic and macro-economic effects (E McGaughey, 2018). The potential
benefits of creating intelligence are huge... With AI, we would be able to undo some of the
damage done to the natural world by the last one -- industrialization. Every aspect of our lives
will be transformed. In short, success in creating AI, could be the biggest event in the history of
our civilization. But it could also be the last, unless we learn how to avoid the risks.  It will bring
great disruption to our economy". (Stephen Hawkings, 2016).

Reasons behind doing this Research:

With passing time, continuous advancements in technology have changed the vision of society,
especially how we live our lives and what we do for a living. A number of occupations have
been demolished absolutely and various employments that required human assistance have now
been completely automated. Reason, why I opted this topic is that It is time we need to get
familiar with the fundamentals of this innovation, as our future will be connected to it. In this
regard, NCAI is the latest technical institute initiated by Government of Pakistan under the
administration's Vision 2025 to encourage the scientists in the field of AI; assist them establish
and develop AI industry following current global patterns and look for answers for the economic
and employement issues through AI. Hence, we have experienced economic and industrial
revolutions previously, yet AI transformation is very extraordinary. In short, sooner or later the
entire situation is going to change and our future lies on how we adapt this revolution before it
gets too late. As far as the uniqueness of this research is concerned, I have tried to gather all the
updated information, which is why it is quite unique than the previous researches done on AI. I
chose this topic because AI is our future. That future could be bad, or good. I'm rooting for the
good future, personally. With more people working on it, I think it will in the end be a lot safer
for humanity as a whole. We need to set some ground rules, and we people will help make them,
and put them to use by getting command on it.