Very good article. One question I’m curious for your take on: I could see a story where AI actually benefits LMICs if it commoditizes a lot of intellectual and managerial work, making physical work relatively more important.
Do you think that’s a possibility? Or do you think the gains from that shift would mostly accrue to higher income countries with strong industrial capacity and institutions?
Good question, but I think probably not, unfortunately —
- Knowledge work even if fully automated will mean big gains that flow to the frontier labs and their home countries, even if not to 'labor' / wages directly
- Manufacturing as a path to growth was already closing for structural reasons; it's more skill- and capital-intensive than it used to be.
- AI-enabled robotics are likely not too far behind, and the relative value of physical work will fall if robots undercut it; this may also drive re-shoring of manufacturing back to rich countries, which would compound the harm
I am planning a future post more focused on the likely impact to LMIC growth pathways!
Why wouldn't this argument he applied to the ICT revolution in general? LMICs didn't manufacture network switches or telecommunication cables or mobile phones. All of this is still imported.
The largest welfare gains of technology comes from technology adoption and not production.
Very good article. One question I’m curious for your take on: I could see a story where AI actually benefits LMICs if it commoditizes a lot of intellectual and managerial work, making physical work relatively more important.
Do you think that’s a possibility? Or do you think the gains from that shift would mostly accrue to higher income countries with strong industrial capacity and institutions?
Good question, but I think probably not, unfortunately —
- Knowledge work even if fully automated will mean big gains that flow to the frontier labs and their home countries, even if not to 'labor' / wages directly
- Manufacturing as a path to growth was already closing for structural reasons; it's more skill- and capital-intensive than it used to be.
- AI-enabled robotics are likely not too far behind, and the relative value of physical work will fall if robots undercut it; this may also drive re-shoring of manufacturing back to rich countries, which would compound the harm
I am planning a future post more focused on the likely impact to LMIC growth pathways!
Great article! I had just been wondering about this topic myself.
Thank you!
Why wouldn't this argument he applied to the ICT revolution in general? LMICs didn't manufacture network switches or telecommunication cables or mobile phones. All of this is still imported.
The largest welfare gains of technology comes from technology adoption and not production.