The size of an economy is measured in GDP (gross domestic product). GDP is calculated by adding the value of all goods and services produced within a country in a given year. This includes the value of goods and services produced by the government and the private sector. GDP is usually measured in monetary terms, using current market prices for goods and services. GDP is used to measure the size and strength of an economy, as well as the overall level of economic activity. It is often used to compare the economies of different countries and track economic growth over time.
There are several traditional ways to increase GDP:
- Encouraging innovation and entrepreneurship: Encouraging people to start their own businesses and come up with new ideas can lead to the creation of new products and services, thereby expanding economies of scale.
- Promoting free trade: Removing trade barriers promotes the exchange of goods and services, thereby boosting economic growth.
- Investing in education and training: By investing in education and training, individuals can develop new skills and knowledge, leading to increased productivity and economic growth.
- Fostering an Enabling Business Environment: An enabling business environment, including access to capital, regulatory support, and a skilled workforce, can encourage business entrepreneurship and growth, thereby promoting economic growth.
- Promoting sustainable development: Sustainable development that takes into account economic, social and environmental factors can lead to long-term economic growth.
- Encourage collaboration and cooperation: By fostering a culture of collaboration and cooperation, businesses and individuals can co-create new opportunities, thereby promoting economic growth.
All of the above rely on skilled human resources to increase economies of scale. Generally speaking, under other conditions being equal, a larger population tends to correspond to a larger economic scale. This is because a larger population provides more labor, consumers, and producers, thereby boosting economic growth. For example, a larger population may allow for the production of a greater variety of goods and services because a larger population has a greater demand for those goods and services. Larger populations also enable economies of scale, in which the cost of producing a good or service falls as more volume is produced.
Now, let’s explore what would happen if an AI race entered the world. How does this new species contribute to GDP? One way to measure the size of an economy is to multiply GDP per capita by the labor force. Therefore, the size of an economy is limited by the number of working people. What if the number of workers becomes infinite by incorporating “AI humans” into the workforce? Are we starting to approach an infinite economy — an economy with no limit to its GDP? Let’s delve into this by understanding the impact of existing (non-AI) robots in industry, as one small step towards an AI-based workforce-based infinite economy.
Robots already contribute to the economy in a number of ways:
- Increased Productivity: Robots can work 24/7 without getting tired or needing a break, increasing productivity and output. This can increase profits for businesses and boost economic growth.
- Job creation: While robots can replace some jobs, they can also create new jobs in the fields of programming, maintenance and supervision.
- Reduced costs: Automation can save businesses money by reducing labor costs and increasing efficiency. These savings can be passed on to consumers at lower prices, stimulating economic activity.
- Increased efficiency: Robots can perform tasks faster and more accurately than humans, increasing efficiency and productivity in various industries. This can improve competitiveness and economic growth.
- Innovation: The development and use of robots can drive technological innovation and progress in various fields, thereby driving economic growth.
Extrapolating the impact of robots on the size of the economy, we can say that an AI workforce can contribute to the economy by increasing productivity, reducing labor costs, and improving decision-making processes. AI can perform tasks faster and more accurately than humans, increasing the efficiency and cost savings of businesses. Additionally, AI can analyze data and make informed decisions, helping businesses make better business decisions and increase profits. The development and implementation of AI technologies can also create jobs and stimulate economic growth. However, the extent to which the AI workforce contributes to GDP will depend on a variety of factors, such as the size and adoption of the AI workforce, the types of tasks being performed, and the overall economic conditions of the country. Overall, integrating AI into the workforce can improve the competitiveness and growth of businesses and economies.
But whether AI workers should be counted in GDP remains a complex question. On the one hand, AI workers could increase economic productivity and efficiency by performing tasks faster and more accurately than human workers. This could lead to increased profits and economic growth. AI workers, on the other hand, do not require wages or benefits, and do not directly contribute to the consumption of goods and services, which are key components of GDP.
There are also ethical considerations to consider. If AI workers are counted in GDP, this could lead to rising unemployment and stagnant wages for human workers. There is also the question of whether AI workers should be considered entities with similar rights and protections as human workers.
In conclusion, AI has the potential to increase GDP and eventually lead to an infinite economy. Ultimately, however, the decision to include AI workers in GDP should be made after carefully weighing the potential economic and ethical implications. Regardless of the outcome of an AI species landing on the world, it is clear that we will see a step function impact on the economy.