Why AI’s spoils will pass South Africa by
Few questions matter more than what the long-term economic and social impacts of AI are, particularly for countries such as South Africa, which are a long way — in every sense — from the AI deus ex machina.
Few matters loom larger than the long-term economic and social ramifications of artificial intelligence (AI), especially for nations like South Africa that are far removed from the transformative effects of AI. Natale Labia, a partner and chief economist at a global investment firm, penned an opinion piece on the subject.
AI's influence seems to amplify existing concerns, akin to how data-center capital expenditure now serves as the final driving force in the US economy and a significant driver in China's as well. In this context, the long-term economic and social impacts of AI take precedence over other considerations.
However, the pessimistic viewpoint, espoused by some within the AI industry, has become a widely accepted belief. Dario Amodei, CEO of Anthropic, estimates that half of entry-level white-collar jobs could vanish within five years. This perspective posits that agentic software and advanced humanoid robots will substitute for both white-collar and blue-collar labor, leaving most people with minimal assets and diminishing labor value.
Despite this, a dose of skepticism is warranted. These sentiments come from entities with vested interests, and their views serve as informed conjecture rather than definitive conclusions. While AI deployment within the economy is still in its infancy, labor market data presents limited and inconclusive evidence of disruption, as noted by Nobel Prize-winning economist Daron Acemoglu. He suggests that AI's total factor productivity gain may fall well under 1% over a decade, primarily impacting a few sectors.
Nevertheless, there may be a kernel of truth in the skeptical stance. If AI-induced productivity gains accrue primarily to capital and a small group of expert workers, the consequences could be socially devastating and exacerbate inequality. David Autor and Neil Thompson have demonstrated that automation can lower wages in both low-expertise and high-expertise sectors, depending on which parts of the job are replaced by machines.
Furthermore, past innovation patterns indicate that AI could further concentrate returns in the hands of capital, potentially widening socioeconomic divisions.
Written by urgent.news from Daily Maverick's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
