SFC Markets and Finance｜Christopher Pissarides: AI can improving efficiency without replacing worker

南方财经全媒体记者 郑青亭 李依农 北京、上海报道

Christopher Pissarides, 2010 Nobel Laureate in Economics, discussed the profound impact of AI on the economy at the 2024 China Development Forum. Pissarides highlighted that generative AI, like ChatGPT, could affect a broader range of occupations, potentially improving efficiency without necessarily replacing workers.  He also emphasized that AI can play a role as a transformative force rather than a sudden catalyst for growth. Moreover, Pissarides dismissed concerns about AI exacerbating social inequality, attributing such outcomes to human decisions rather than inherent flaws in AI technology. He encouraged a more inclusive approach to AI development.

SFC Markets and Finance: Since the beginning of 2023, ChatGPT has ignited the world's imagination about the power of AI. How does AI differ in scope and speed compared to previous technologies?

Christopher Pissarides: I think AI developments, especially generative AI like ChatGPT, are going to have a bigger impact on the economy than previous technologies because they can cover a much bigger range of occupations where they can influence the way the occupation is done. You don't necessarily replace people in those occupations, it might've increased the efficiency right there already, but it would be relevant to a much bigger fraction of the labor market than, say, growth is for even computers before.

SFC Markets and Finance: Do you think the pace of AI development is much faster than previous technologies?

Christopher Pissarides: Maybe. The pace of AI development is faster, but the application of AI to the economy, I don't think it's faster. Talk about it, if it is faster because things can be done in a much faster way, but, we don't see any evidence yet that it is possible implication.

SFC Markets and Finance: Last year, the World Bank predicted that the global economy may be experiencing last decades with growth rates falling to their lowest in nearly three decades. Do you think AI can save the sluggish global economy?

Christopher Pissarides: I don't think this. And these are not technologies that will give you an immediate shock, and suddenly the economy starts growing faster. There will be a very slow process by which AI is incorporated into the economy, and then it's going to change the way we do things. It would improve the quality of many things we do for sure, you might think. And hopefully, we will improve the quality of jobs that people are doing. It should affect productivity, but it's not something that we're suddenly going to see the economy would like, jumping up and growing faster. So be more kind of fundamental things, if you like, rather than just giving the spare like a shock.

SFC Markets and Finance: How do you see the impact of AI on rich countries and poor countries? Do you think the use of AI will form a new digital divide between countries?

Christopher Pissarides: Well, new technologies are inevitably forming divides between countries because rich countries can apply them faster. And also, they're developed in rich countries, so they're developed to suit the requirements of rich countries more than the poor countries. So you cannot avoid that. And because they are more sophisticated technologies, there's a good chance that it will like to increase the device further.

On the other hand, they don't need very expensive equipment to be applied. These technologies work out in favor of developing countries being able to find applications. So it's not completely straightforward. You'll be balanced. If I had to take that, I would probably say that it will increase the divide by more because it's developed from rich countries.

SFC Markets and Finance: But in the past, poor countries can use their comparative advantages, like resources and popularity. Now, do you think they lose the chance to catch up with the rich countries? Because it's more capital-intensive and technology-intensive?

Christopher Pissarides: You say they lose the chance. I don't think they have much of a chance of catching up before anyway because of the divide they have. And you need to look at the reasons that they're behind as well, many of them are behind because they have very bad politics. Now new technology will not make them improve their politics.

It is certainly true that the old development model where you use your low-cost labor to develop low-cost manufacturing export, that model is not likely to be a very productive development model because with new technology, when you're doing those things, you're not going to need many labor-intensive manufacturing products the way you needed them when China first opened up. So it's going to be very difficult, more difficult for developing countries than before.

SFC Markets and Finance: Let's talk about its impact on labor. What lessons can we learn from the past when we faced other technologies like computers or the Internet?

Christopher Pissarides: The lesson that we've learned is that we shouldn't let any groups of the labor force languish in a way to stay outside that technology, that development. And eventually, you reach a situation where they cannot enter and benefit. To do that, we need to provide a very quick response to the training programs available. Help from the government would be good, yeah, to help us train workers in that direction, and also the school education system to adapt quickly. It's quite important to respond quickly with training, help, changing jobs into new technology jobs, and good social support from the government in the transition. So we don’t just rush into a job or don’t just withdraw from the whole labor market altogether.

SFC Markets and Finance: Could you further elaborate on the government's role in this process? How would they better prepare the social welfare of those people?

Christopher Pissarides: I think the primary role is to give social support. So when workers are in between jobs, when they're unemployed, for example, they make a transition in their own time to find the jobs that they are best at and suited for, and to be able to learn the new skills before they start working with new technologies. Otherwise, they could be left behind together.

Now, if you wanted to go to a more expensive route, the way that Scandinavian countries in Europe are doing, for example, then the government would subsidize the training in-between. Or you can go the German way, where they have apprenticeships in place of higher education, where the government gives as much support to young people to go in and learn the skill of the company rather than go to school, university, or college.

But the problem is the older groups, you know, people over 50 or something that leave jobs that were very difficult for them to be trained. There could be an effort to provide special training programs for the 50s, that are done with government support through colleges of retraining, and a lot of re-skilling.

SFC Markets and Finance: Will generative AI create more jobs or shed more jobs?

Christopher Pissarides: AI, so far, has been creating more jobs, but it hasn't been applied very much. I think we restructured many jobs for sure, like jobs like, lawyer's assistance will prepare long reports relevant to the case that, the lawyer's examining, for example, could be done by ChatGPT, but then it could also be used in a complementary way to help. So it's not the case that AI will replace jobs, or that it will be able to do our jobs and we will not need to work. As some people say, that's not the case, and the jobs will still be there. We need to work with AI 

SFC Markets and Finance: Will it lead to an increase or decrease in pay?

Christopher Pissarides: No, for pay it would be an increase. Because you become effective, it would be a skill like you will have and that's more effective and so they should be paid more.

SFC Markets and Finance: You also predict that in the future people only need to work four days (per week), right?

Christopher Pissarides: If we want to work four days. We should be able to. Because as the society's wealth goes up, we want to work less and take more leisure time. And in fact, hours of work have fallen a lot, you know, hours of work in Europe weekly on average, they range from 27 to 37. 

If you go back 30 years ago, you'll find that they're closer to 40 hours a week. So as you are coming down for four days a week, you could say it's about 30 hours. You could structure that 30-hour work with currently a four-day week. And if that's what people want to have a three-day weekend, they should be able to do it with the level of economic development we have now.

SFC Markets and Finance: I'm so happy to hear that. But when will it happen then?

Christopher Pissarides: It could happen anytime, it can happen now! You could take off Friday if you like to have a 3-day weekend!

SFC Markets and Finance: Some people worry that AI will create a large number of useless classes, increasing the solidification of social classes in exaggerating social inequality. Do you worry about this?

Christopher Pissarides: No, I don't worry about this. It's only, it's up to us, how we use AI. Yeah, if people want to create a class of workers, it's like, it's just pushed aside and not allowed to have interesting work, they can do it, but it's not the fault of AI, it's the fault of people. We should make sure there is a more inclusive kind of development.

SFC Markets and Finance: What are your suggestions for younger generations? How should they prepare for the upcoming AI?

Christopher Pissarides: They should learn some STEM skills and how to work with AI, and how to understand data, but they should also learn how to behave at work, communication skills, transparency, and being able to offer a passionate process of service, because the service economy will employ mostly young people.

策划：于晓娜    

监制：施诗

责任编辑：李依农

记者：郑青亭 李依农 

制作：蔡于恬

新媒体统筹：丁青云 曾婷芳 赖禧 曾昭发

海外运营监制: 黄燕淑

海外运营内容统筹: 黄子豪

海外运营编辑：庄欢 吴婉婕 龙李华 张伟韬

出品：南方财经全媒体集团