Positive and Negative Impacts of Artificial Intelligence (AI) on Society

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This report discusses the upbringing of Artificial Intelligence (AI ) in society and lists the pros and cons of the new upcoming age of technology in terms of economics and the impacts it can have on society. It will discuss how all types of businesses can increase their profitability by using AI and machine learning to increase production without fear of human error, and will also discuss how AI can negatively affect society in terms of job losses and detriments to the world economy and globalization In the end it will be concluded that the future for AI is definitely bright, and that it is unlikely for research and development for AI to stop anytime soon, however, we can only make educated guesses on the topic until then since the future of AI is highly unpredictable. As of right now we can also conclude that the major development of technology will lead into a new age in tech and with its positives it will lead to its own variety of problems to take care of, just like past discoveries, and that as individuals of the scientific community, we must be informed on this topic in order to anticipate and watch a new chapter of history unfold.

Keywords:​ Artificial Intelligence, Economic growth, Society, GDP, Market structures, Globalization, Digitalization, Energy Consumption.


AI has been the topic of discussion since the late 20th century. Whether it be in science fiction or slow developments of robots from different laboratories across the world. However, with the anticipation, came skepticism, as the topic has been debated by many if the usage of AI can eventually lead to a sustainable, more advanced future, or a dystopian one. The topic is a complex yet serious one, as it should be, since this development will lead to a new era of technological advancement such as the industrial revolutions. And with every revolution, there comes consequences and problems that cannot be ignored. The term "Artificial Intelligence" is restricted into two catagories:

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Definitions of artificial intelligence fall into two main categories. On the one hand there are systems that think and act like humans. These are machines with minds performing activities such as decision-making, problem solving and learning, which require intelligence. These kinds of definitions measure success in terms of fidelity to human performance. On the other hand there are systems that measure success against an ideal concept of intelligence, in which a system is intelligent if it takes the best possible action given what it knows. These systems use computational models that make it possible to perceive, to reason and to act (van de Gevel, Noussair, 2013).[1]

With the definition present, is obvious as to why some have concerns about AI being introduced into society. From government officials speaking publicially about the topic to billionaires like Elon Musk expressing ​ ​"people should be really concerned about it" (Agrawal, Gans, Goldfarb, 2018)2, it is vital at this point that we start thinking about our future. This report will focus on the​ positive aspects of implementing AI systems in our society and what consequences can befall from that same implementation as well. A conclusion will be reached at the end of the report as to what opinions we can form on the topic of Artificial Intelligence and its effects on the economy, and in turn, society as a whole.

Positive effects of Artificial Intelligence on Economy and Society

The possibilities for AI are endless, from a medical perspective, educational perspective, and of course, a business perspective. In a business, the goal is to make the most optimal amount of money in the shortest amount of time with the least products and resources used, especially if resources are scarce. To accomplish this goal, many businesses may implement the use of AI to cut costs on other forms of capital, mainly human capital. This replacement can result in an increase in productivity and efficiency in the business.

Figure 1: Graph shows different markets/industries and how they plan to adopt and absorb new technology, such as AI, in the next few years. It shows that all sectors will be forced to become more automated, especially in Telecom, Financial Services, and Health Care. Taken from Ransbotham, S., Kiron, D., Gerbert, P., & Reeves, M. (2017, September 6).

Reshaping Business With Artificial Intelligence. Retrieved November 9, 2019, from https://sloanreview.mit.edu/projects/reshaping-business-with-artificial-intelligence/​.

Furthermore, AI can be used as a competitive advantage, as "87​ % of current AI adopters said they were using or considering using AI for sales forecasting and for improving email marketing" (Columbus, 2018)[2]. This competitive advantage is useful in monopolistic companies,​ since they need to set apart their products and services from the rest of the market. In fact, all forms of markets and businesses can benefit from the use of AI, as all market structures can benefit from the use of AI as it generally increases revenue and efficiency, as mentioned above.

In addition, the usage of AI might result in a boost in GDP growth, as China is predicted for a 26% growth in GDP (around $7 trillion in GDP) ​ and a 14.5% increase in North America​ (around $3.7 trillion in GDP)​ , and will likely boost the stock markets since higher GDP will​ increase corporate earnings and stocks. The boost in GDP will demonstrate high economic progress and efficiency, and in turn, result in a better economy.4

Figure 2: Diagram representing the GDP growth for several countries/areas in relation to AI. China is the country that will gain the most via AI and shows China's dominance over the AI market. Taken from Probst, L., Pedersen, B., Lefebvre , V., & Dakkak-Arnoux , L. (2018). ​

Negative effects of Artificial Intelligence on Economy and Society

Some markets or countries might not be ready for the usage of AI, as some countries are more technologically advanced than others. Most first world countries with strong foundations may be prepared to invest in AI and start its usage, while developing countries in poverty may catch up with the usage of AI much later as they cannot afford to or have the capacity to use anything majorly high-tech.

Furthermore, There is worry that AI would be taking hundreds upon thousands of jobs in the future, since AI is a considered a better replacement. There have been numerous studies that documented the loss of jobs when newer, improved technology was added to the workplace; an example would be how automated factories can easily replace the need for human capital. If individuals are needed to work in a business, then they would have to adapt to new technology as employers will require and demand workers experienced with technology. There might not be a huge supply of workers with such skills, thus will but most workers at a disadvantage.

Even industries such as the essay writing sector are affected by the rise of AI chatbots such as ChatGPT, a system capable of writing academic papers to a good standard providing it is fed with appropriate input. You can see a number of ChatGTP essay examples here.

This negative impact may be considered one of the main negative externalities of the production of AI. In addition, brick and mortar stores may shut down when AI is introduced because of the increase of digitalization. This is not a new concept however, since small businesses and bookstores have been losing popularity and business because of digitalization and cheaper alternatives from bigger companies.

Figure 3: Graph showing the demands for certain skills in jobs. Taken from Columbus, L. (2018, January​ 19). 10 Charts That Will Change Your Perspective On Artificial Intelligence's Growth. Retrieved from https://www.forbes.com/sites/louiscolumbus/2018/01/12/10-charts-that-will-change-your-perspective-onartificial-intelligences-growth/#1b6af1147583.​

There is also concern that the cost of production and maintenance of Artificial Intelligence will be incredibly expensive, since a "robot with a processor as smart as the human​ brain would require at least 10 megawatts to operate" (Melnikov, 2019a) which is "enough energy produce enough energy for a small hydroelectric plant" (Melnikov, 2019b)5. This amount of energy for one AI is extraordinarily high and is not realistic, at least at this time. This, and many other studies on energy consumption via AI proves that if the world wants to advance with the idea of Artificial Intelligence, it must rethink its production of energy and how to get this product to work without draining the society. Lastly, there is the fear of using AI to establish digitized nationalism and militarization, as the good that these systems bring back also bring power to whichever country develops it the best. Countries like Russia and China already have made steps to this goal (where Russia is passing laws and China is developing weapons), which make other countries like the United States worry about their status and where itself lies. These negative factors that come along with the production and establishment of AI make globalization (in terms of technology and AI) a difficult prospect to overcome.

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The future of AI looks bright as innovations the "deployment of AI in production is likely to increase over time, due to the development of automated learning processes" (European Union, 2019), as the drive for a society to improve and innovate is inevitable. However, the future of AI is still uncertain. Although we can make predictions on its future, we cannot determine what new technologies will consequent to. The only assumptions we can confirm is that the usage of AI will have a positive and negative impact on the society and economy as a whole when the use of AI comes into play, and that the introduction of a new technology will progress humanity into a new age, just like it did with past revolutionary technologies. Also, we can also conclude that AI has a long way to come, since sufficient energy, time, and money is needed to be invested in such an enormous project in order to have it even close to feasible in the upcoming years. For now, the best thing we can do as individuals is to keep informed on topics that relate to machine learning and artificial intelligence in order to stay in touch with the compelling, yet daunting topic.

References (APA)

1. Agrawal, A., Gans, J., & Goldfarb, A. (2018). Prediction machines : The simple​ economics of artificial intelligence. Retrieved from​ https://ebookcentral-proquest-com.ezproxy.lib.ryerson.ca

2. Bryson, J. J. (n.d.). The Past Decade and Future of AI's Impact on Society. Retrieved November 9, 2019, from https://www.bbvaopenmind.com/en/articles/the-past-decade-and-future-of-ais-impact-on-society/.

3. Chatterjee, S. (2019, July 15). Facts and Figures on how AI is impacting the economy and shaping the GDP worldwide. Retrieved November 9, 2019, from https://medium.com/datadriveninvestor/facts-and-figures-on-how-ai-is-impacting-the-eco nomy-and-shaping-the-gdp-worldwide-188ce96f4ce9.

4. Columbus, L. (2018, January 19). 10 Charts That Will Change Your Perspective On Artificial Intelligence's Growth. Retrieved from https://www.forbes.com/sites/louiscolumbus/2018/01/12/10-charts-that-will-change-your-perspective-on-artificial-intelligences-growth/#1b6af1147583.

5. European Union. (2019). Economic impacts of artificial intelligence (AI). EconomicImpacts of Artificial Intelligence (AI)​, 1–8. Retrieved from http://www.europarl.europa.eu/RegData/etudes/BRIE/2019/637967/EPRS_BRI(2019)637967_EN.pdf

6. Gevel, A. J. W., & Noussari, C. N. (2013). The Nexus Between Artificial Intelligence and Economics. The Nexus Between Artificial Intelligence and Economics​ ​, 1–111. doi: 10.1007/978-3-642-33648-5

7. Probst, L., Pedersen, B., Lefebvre , V., & Dakkak-Arnoux , L. (2018). Usa-China-Euplans for AI: where do we stand?USA-China-EU plans for AI: where do we stand?​ ​ (pp. 1–8). European Union, from https://ec.europa.eu/growth/tools-databases/dem/monitor/sites/default/files/DTM_AI%20USA-China-EU%20plans%20for%20AI%20v5.pdf

8. Marr, B. (2018, July 10). The Economics Of Artificial Intelligence - How Cheaper Predictions Will Change The World. Retrieved November 9, 2019, from https://www.forbes.com/sites/bernardmarr/2018/07/10/the-economics-of-artificial-intellig ence-how-cheaper-predictions-will-change-the-world/#6886c0575a0d.

9. Marr, B. (2019). What Are The Negative Impacts Of Artificial Intelligence (AI)? Retrieved November 9, 2019, from https://bernardmarr.com/default.asp?contentID=1827.​

10. Ransbotham, S., Kiron, D., Gerbert, P., & Reeves, M. (2017, September 6). Reshaping Business With Artificial Intelligence. Retrieved November 9, 2019, from https://sloanreview.mit.edu/projects/reshaping-business-with-artificial-intelligence/.​

11. Team, G. (2019, May 22). Artificial Intelligence Ends Globalization. Retrieved November 9, 2019, from https://www.grayling.com/global/en/insight/artificial_intelligence_ends_globalization.​

12. Wagner, D. (2018, November 15). How Artificial Intelligence is Changing the Global Economy. Retrieved November 9, 2019, from https://ourworld.unu.edu/en/how-ai-is-changing-the-global-economy.

13. Weber, S., & Stanton, C. (2019, October 2). The World Isn't Ready for AI to Upend the Global Economy. Retrieved November 9, 2019, from https://carnegieendowment.org/2019/10/02/world-isn-t-ready-for-ai-to-upend-global-eco nomy-pub-79961.​

14. Wladawsky-Berger, I. (2018, November 26). The Impact of Artificial Intelligence on the World Economy. Retrieved November 9, 2019, from https://blogs.wsj.com/cio/2018/11/16/the-impact-of-artificial-intelligence-on-the-world-e conomy/.

[1] ​Agrawal, A., Gans, J., & Goldfarb, A. (2018). Prediction machines : The simple economics of​ artificial intelligence. Retrieved from ​ https://ebookcentral-proquest-com.ezproxy.lib.ryerson.c a

[2] ​Columbus, L. (2018, January 19). 10 Charts That Will Change Your Perspective On Artificial Intelligence's Growth. Retrieved from


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