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People watch a demonstration of a robotic floor cleaner, one of seven acquired for cleaning on campus at the University of British Columbia, in Vancouver on Oct. 26, 2018. Despite making for eye-catching headlines, fears of AI creating massive unemployment are largely exaggerated.DARRYL DYCK/The Canadian Press

Luc Vallée is chief economist and Gaël Campan is senior associate researcher at the Montreal Economic Institute.

Almost everybody agrees that the rise of artificial intelligence (AI) will transform our lives both at home and at work. But while the net long-term effect of AI on employment, just as with all previous technological revolutions, will be positive, some worry that in the shorter term AI could eliminate jobs faster than they can be replaced.

We should not disregard the plight of affected workers, to be clear. Pro-active measures can and should be taken to limit the risk of unemployment caused by AI and to reduce its duration when it does occur. Yet, despite making for eye-catching headlines, fears of massive unemployment are largely exaggerated.

First and foremost, AI is a powerful growth engine. PricewaterhouseCoopers estimates that AI’s contribution to global GDP will basically equal that of the entire euro zone by 2030. And importantly, AI will administer its own unemployment antidote, with structural changes in the labour market because of AI and related technologies projected to create 58 million net jobs worldwide by 2022.

Indeed, there is good reason to think that AI creates jobs in various ways. For one thing, human-machine complementarity is highly productive and can increase the demand for the combined service. For instance, in the 1980s, electronic spreadsheets automated many tedious bookkeeping tasks, allowing for higher-value-added activities and actually driving up investment in accounting services by 50 per cent.

AI also allows less experienced or less skilled workers to be more productive, and will create strong job opportunities for unemployed workers regardless of their level of education. For example, advanced software already supplies marketers with high-quality leads from Day 1 and can support them further with dynamic algorithms to increase customer retention.

Bottom line: Whether workers develop, operate, maintain or collaborate with AI-enabled tools, they will be more productive and will benefit from better paying, less risky and more gratifying job opportunities.

Pro-active mitigation

Admittedly, certain occupations are less susceptible to automation than others. Most highly qualified workers will keep developing AI and expanding its fields of application. Some less-qualified workers will benefit from the investment in complementary AI-enabled tools.

In contrast, many middle-income employees at the lower end of the occupational ladder – whose jobs are more susceptible to computerization and as workers are too expensive to merely operate or maintain machines – may have to migrate from manufacturing to services, where creative and social skills (harder for AI to master) are of the essence.

At any rate, we can and should try to alleviate the predicament of those most likely to be affected by technological unemployment caused by AI. We should:

1) Reorient education and training

Investing in human capital is essential if we are to make the most of the economic opportunity AI represents. There is a shortage of aptitudes that are harder for machines to master, such as complex problem-solving, teamwork and leadership. While some companies are bridging the gap by improving the skills of employees directly, colleges should develop closer relationships with business in order to better cope with a rapidly evolving environment.

2) Remove obstacles for businesses to recruit

The removal of obstacles to doing business encourages economic growth and job creation. Although Canada does well on many counts, the high level of government spending, the high top marginal tax rate and the mediocre legal enforcement of contracts are major impediments to business development in Canada.

3) Encourage business creation

AI itself will make business creation and self-employment easier and less risky. ​Entire supply chains can be AI-enabled, suppliers can be found on dedicated platforms and global-distribution platforms provide unprecedented customer reach. Yet, lack of general and financial-management skills are still a hurdle to success for SMEs, which brings us back to schools: It is important to prepare students to become not just employees, but also business owners. Meanwhile, entrepreneurship can be encouraged immediately by cutting tax rates for business owners.

The rapid development and deployment of AI is an opportunity that should be embraced instead of feared. But it also magnifies the urgency of these kinds of structural reforms that would help Canada minimize the duration of transitional unemployment, while strengthening its leadership in terms of economic freedom and ease of doing business.

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