While artificial intelligence (A.I.) will boost productivity by 3.6% in the United States, 3. 9% in Germany and 4.2% in Japan, it will only drive up economic efficiency by 2.9% in Mexico.
New studies about the likely economic impact of ChatGPT and other artificial intelligence-powered tools should be sounding alarm bells throughout Latin America: They suggest that the region may fall further behind the technologically-advanced world.
Generative artificial intelligence, as the latest technology is known, is likely to add up to $4.4 trillion a year to the world economy, according to a just-released study by the McKinsey consulting firm. But much of the additional economic gains will go to technologically-advanced countries, the report says.
While artificial intelligence (A.I.) will boost productivity by 3.6% in the United States, 3. 9% in Germany and 4.2% in Japan, it will only drive up economic efficiency by 2.9% in Mexico, it says.
The report, titled “The economic potential of generative AI,” concludes that adoption of artificial intelligence is “likely to be faster in developed countries.”
High wages in rich countries create a greater rush for automation to cut costs. By comparison, lower wages in countries like Mexico put less pressure on companies to adopt artificial intelligence, it explains.
Fernando Vargas, a technology expert with the Inter-American Development Bank, did not seem surprised by the report’s conclusions. He told me that industrialized countries may become more productive faster for the simple reason that if you already have a technological advantage, it’s easier to build on it than if you don’t.
“With this new technological leap, our region’s already urgent need to innovate becomes even more crucial,” Fernandez told me, referring to Latin America. “If we don’t do anything, we’re going to see a continuation of the trend whereby those who know most will learn the new technologies quicker.”
There will be more jobs lost to automation than previously expected, the McKinsey report says. While the consulting firm had previously calculated that up to 50% of workers’ activities will be automated, it now estimates that, with the arrival of generative A.I., the potential of automation will rise to 70% of people’s tasks.
Curious about which industries will lose more jobs in Latin America as a result of generative A.I., I posed that question to the ChatGPT and Bard chatbots. They pointed, among other sectors, at the region’s call centers, customer service and back-office operations. Much of their work currently done by humans will be replaced with AI-powered chatbots, which will become better at answering questions naturally and in a more personalized way, and can work 24/7, they said.
“Chatbots can perform many of the same tasks as human workers, but they can do so at a lower cost,” the Bard chatbot explained. “This could lead to higher unemployment and inequality in Latin America.”
Vivek Wadhwa, a Silicon Valley entrepreneur and author of several books on the impact of new technologies, told me that countries, companies and people who embrace the new A.I. tools will win, and those who don’t face a grim future.
“The lesson for Latin America is that you either embrace the innovations that lead the future, or you become their casualty,” Wadhwa told me. “It’s that simple.”
Some major Latin American companies are adopting the new A.I. tools, but it’s far from clear whether most of the region is moving fast enough. Between January and March, the United States accounted for 10.4% of worldwide visits to ChatGPT, whereas India accounted for 9.8%, Brazil for 2.2%, Mexico for 1.7% and Argentina and Chile for 0.7%, according to the Similarweb traffic analysis firm.
I’m not a techno-pessimist, because history has shown that new technologies — while killing many jobs — usually end up creating more jobs than they eliminate. A.I. will allow small companies everywhere to become more productive and grow with inexpensive A.I. tools that until recently only big corporations could afford.
The age of generative A.I. is just starting. If Latin America does not want to fall further behind, countries should waste no time starting to teach children in schools how to give the right prompts to Chatbots, and provide free classes or vouchers for companies to learn how to use these new A.I. tools to become more productive.
To do that, the region’s leaders should start by recognizing that their countries face a new, formidable challenge. Unfortunately, most of them are talking about 19th century issues, unaware that the world has entered a new era.
©2023 The Miami Herald. Distributed
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