AI Superpowers: China, Silicon Valley, and the New World Order

by Kai-Fu Lee

THE BOTTOM LINE Putting together percentages for the two types of automatability—38 percent from one-to-one replacements and about 10 percent from ground-up disruption—we are faced with a monumental challenge. Within ten to twenty years, I estimate we will be technically capable of automating 40 to 50 percent of jobs in the United States. For employees who are not outright replaced, increasing automation of their workload will continue to cut into their value-add for the company, reducing their bargaining power on wages and potentially leading to layoffs in the long term. We’ll see a larger pool of unemployed workers competing for an even smaller pool of jobs, driving down wages and forcing many into part-time or “gig economy” work that lacks benefits. This—and I cannot stress this enough—does not mean the country will be facing a 40 to 50 percent unemployment rate. Social frictions, regulatory restrictions, and plain old inertia will greatly slow down the actual rate of job losses. Plus, there will also be new jobs created along the way, positions that can offset a portion of these AI-induced losses, something that I explore in coming chapters. These could cut actual AI-induced net unemployment in half, to between 20 and 25 percent, or drive it even lower, down to just 10 to 20 percent. These estimates are in line with those from the most recent research (as of this writing) that attempted to put a number on actual job losses, a February 2018 study by the consulting firm ...