The Globe’s bimonthly report on research from business schools.
What does the rise of the artificial intelligence era mean for international trade?
With tech giants such as Google, Amazon and Apple going all in on artificial intelligence in the West, and rapid advancements by China’s AI leaders Baidu, Alibaba and Tencent in the East, it seems we’re on the brink of another technology revolutionary.
The imminent AI age already has many people talking about the technology advancements to come — everything from wearable devices that calculate oxygen consumption in the muscles and voice-enabled ’bots that can reliably recommend your favourite music and movie choices, to sophisticated missile systems capable of disrupting how we think of modern warfare.
But University of Toronto economists Avi Goldfarb and Daniel Trefler believe it’s equally critical we study the impact AI will have on international trade.
“AI will both create and destroy jobs. We are trying to understand how the balance of these creative/destructive forces will play out,” the researchers say in an e-mail.
“We are asking: Where will the new jobs be? Whose occupations are most vulnerable, and do we have an appropriate safety net to ensure that the inevitable losers from this new technology do not suffer unduly.”
To answer those questions, the two recently joined forces on an academic paper to be published in the forthcoming conference volume for the National Bureau of Economic Research Conference on the Economics of Artificial Intelligence.
A key observation in the paper is that China is becoming an AI superpower faster than most of the world has anticipated — so much so, it’s poised to match Silicon Valley’s authority in the tech arena.
That’s not necessarily a bad thing, the researchers note.
“Innovation is not a zero-sum game. … AI technologies developed abroad will inevitably be used and further developed here in Canada. This will be much to our benefit,” they say.
However, the paper also identifies reasons why China’s rise may be harmful to other countries, including Canada. This includes China’s commitment to train AI scientists and the possibility that a small number of very large firms will come to dominate the AI space (the only non-American AI giants are all from China, including Alibaba and WeChat), so smaller countries such as Canada may be squeezed out.
With the race for AI dominance continuing, Dr. Trefler and Dr. Goldfarb anticipate more research on the topic.
“Generally, this is an exciting new area for trade research and policy. There is still much to learn before we have a comprehensive understanding of these questions,” their paper concludes.
Dr. Trefler is the Douglas and Ruth Grant Canada Research Chair in Competitiveness and Properity and a professor of economic analysis and policy at U of T’s Rotman School of Management, while Dr. Goldfarb is the Ellison Professor of Marketing and co-author of the soon-to-be pubished book Prediction Machines: The Simple Economics of Artificial Intelligence.
Story ideas related to business school research in Canada can be sent email@example.com.