Can AI Become the Engine for Asia’s Next Growth Wave?
Why AI matters for Asia’s future — and what governments must do now
In an article for the column, Lee Jong-wha called into question the effectiveness of the growth model Asia has been employing which is basically based on production and export. According to him, the onset of trade hostility, aged population, declining labor force and rising inequality are the main factors that impede the economic growth. However, AI may help to turn things around.
AI is a general technology just like power or internet. It has the potential to increase the output of an economy, to do away with the monotonous work by using a machine and to open up new markets, services and innovations. Some of the projections put the worldwide productivity increase at a rate of 0.8–1.3% per year for the following ten years due to AI.
However, the countries need to put the right infrastructure in place if they want to fully exploit the potential of AI. A number of Asian countries are at the different stages in terms of digital infrastructure, workforce skills, and regulation. Economies which are technologically advanced like Japan, South Korea, and Singapore are more prepared for this challenge. India and Indonesia which are emerging economies may be on the right track, but they sometimes lack the necessary infrastructure and training.
Several things must be done before AI can be the driver of the growth in Asia: governments should be ready to finance education especially digital literacy and STEM; they need to facilitate reskilling and support lifelong learning through different programs. They ought to improve social securities in order to soften the shocks that could come from automation, for instance, job losses.
Besides that, nations should foster an environment conducive to open innovation: invest heavily in research and development, create secure data infrastructure, maintain ethical principles, ease access to finance for startups. Letting large corporations have the exclusive privilege to use AI technology will not only hurt the smaller players but also stifle innovation in the industry.
If those measures towards AI are accomplished, it will be possible for the Asian countries to use it as a tool to counter demographic headwinds and regrow their economies. Otherwise, there is the possibility of the advantages being concentrated in a few developed countries or a small number of firms thus increase the level of inequality instead of decreasing it.
To make good use of AI, the government needs to plan carefully, ensure that the policies are in line with each other and that the access to it is inclusive, among other things. This is not flipping a switch today, but the way the governments and the society have to proceed step by step.