Coronavirus And The Rise Of The AI Economy
- Online Date: 2020/05/29
- Modify Date: 2020/06/09
The Covid-19 outbreak is a health crisis that is having a growing impact on the global economy. The pandemic has caused a recession, record levels of unemployment and unprecedented debt levels globally.
According to United Nations data in 2020 and 2021 alone, developing countries’ repayments on their public external debt alone will soar to between $2.6 trillion and $3.4 trillion. The World Bank has predicted the coronavirus is pushing 40 to 60 million people into extreme poverty. Calls for international solidarity have so far delivered little tangible support and the risk of country debt defaults and corporate bankruptcies and the human costs associated with it is rising.
Countries need new economic growth models and AI (artificial intelligence) powered by 5G is increasingly at the forefront as countries, companies and individuals need to seriously think and prepare what’s next post Covid-19. The coronavirus recession is driving more adoption of new business models that are harnessed by AI.
The most valuable companies in the world all use computational social science and over 80% of the daily moves in the U.S. stock market are now believed to be AI machine-led algorithm trading.
The initial development of AI has already affected several niche areas dramatically, but it now seems to impact just about all parts of the economy, and indeed all aspects of our lives.
The unfortunate truth of the global coronavirus pandemic and the AI evolution is that it impacts the most vulnerable people, the low-skilled people in society and the poorest countries the most.
The pandemic is already emptying call centers as AI chatbots are zooming in to replace human call center workers. While call centers have long been a frontier of workplace automation, the pandemic has accelerated the process
As close to 38 million Americans have lost their jobs due to Covid-19 and some of these jobs might not come back, U.S. companies that are on the cutting edge of AI are only growing ever more powerful.
In the global equity market, the leadership is U.S. equities and within this large cap U.S. tech and the so-called FAANG stocks. The 5 most valuable companies in the world are increasingly all AI companies. Facebook, Apple, Amazon, Netflix and Google (Alphabet).
In China, the same situation, Baidu, Tencent and Alibaba are all AI companies. Alibaba and Tencent in terms of market capitalization are the most valuable China domiciled companies and both are cutting edge AI companies.
In 2017, the Chinese government announced plans to “lead the world” in artificial intelligence by 2030. The announcement has fed considerable uneasiness in the U.S. and elsewhere about the scope of China’s aspirations and the extent to which the communist party might use AI to tighten surveillance control over its citizens and develop more sophisticated military capabilities.
Taiwan due to political pressure from the People’s Republic of China is not a member of the WHO (World Health Organization) yet seems to have handled the pandemic surprisingly well. At the time of writing, Taiwan had 442 cases, 7 deaths and 420 recovered from coronavirus despite avoiding lockdown.
Taiwan is also a vibrant democracy that is working in close cooperation with private sector firms in becoming a top destination for artificial intelligence. Taiwan’s Ministry of Science and Technology (MOST) intends to build an AI innovation ecosystem involving different aspects of AI, such as talents, technologies, field domains, and industries, not only aim to achieve a smart society, but also make Taiwan a key player in the global AI value chain.
Taiwan now ranks as the third-best place globally to invest (only outpaced by Switzerland and Norway) and best place in Asia ahead of Singapore and South Korea, according to a tri-annual report by U.S.-based Business Environment Risk Intelligence SA (BERI).
South Korea was hard hit by the early Covid-19 outbreak, but now seems to be seen globally as one of the more successful role models on how best to fight the pandemic. The country is also now making 5G and AI the centerpieces of economy’s ‘New Deal’ in post-coronavirus era.
Covid-19 only accelerates South Korea’s AI ambitions. Last year, President Moon Jae-in launched a National Strategy for Artificial Intelligence, focusing South Korea’s industrial and educational efforts on the potential opportunities in AI.
The cases listed for the potential use of AI in the strategy document offer an answer to some of the biggest challenges confronting Korean society.
Russia a country with an aging population and low growth and now the second most confirmed Covid-19 cases globally is also making strides in AI.
Russia’s Yandex with $13.18 billion market cap is one of the largest and most promising local Russian companies, a mix of Goggle, Amazon and Uber rolled into one, is foremost an AI company now.
Russia’s largest bank, Sberbank and its CEO Herman Gref in a cover story with Forbes Russia, stated that analysts should consider its stock more like an AI company instead of just an old fashioned retail bank. Sberbank created an AI alliance, launched a supercomputer and raised $2 billion for Russian AI developers. End of last year, Sberbank also partnered with Microsoft Research (MSR) to explore the use of Microsoft AI solutions in robotics.
Banks by definition have a lot of customer data but many are still not using nor harnessing this data enough. Deep learning and AI can transform this.
Stanford Professor Andrew Ng famously stated, “Data is the new oil, AI is the new electricity.” In a post Covid-19 world, this could become the new mantra.
Every time there is a major technological disruption, such as of AI, it gives us a chance to remake the world. AI is a very advanced technology, yes affecting both developed economies and developing economies. The advice to developing economies is to focus on AI to strengthen a country's vertical industries and invest in education because AI is still so immature.
In a new world of work, learning to effectively judge what machines can and cannot do, as well as what they should and should not do, will be a critical capability for workers and CEOs alike. In return, human strengths and capabilities will need to be integrated into AI systems to help workers partner more collaboratively with them.
Nobel prize winner Daniel Kahnemann opined that in understanding human behavior, noise–randomness–is even more important than ‘biases’ stating he is looking forward to the day when artificial intelligence will eliminate our natural stupidity.
Bill Gates was one of the few public voices warning not to be complacent about the risk of a pandemic. Gates also stated that "a breakthrough in machine learning would be worth 10 Microsofts."
There's still plenty of opportunity for every nation, company and individual to learn more about artificial intelligence and to prepare but lack of preparation and complacency about AI like complacency about coronavirus could be a deadly mistake.