Artificial Intelligence: A blessing or a curse? What socio-economic challenges will humanity face in the next decades?

Artificial intelligence (AI) is technology that enables computers and machines to simulate human learning, comprehension, problem solving, decision making, creativity and autonomy. (IBM, 2024). I first became interested in AI in early 2024 after learning about ChatGPT and other similar technologies. I was first excited and ready to learn everything I could about AI. I experimented with many programs, including Gemini, Perplexity AI, Adobe Firefly, and Microsoft Copilot, made prompts, and asked questions. My excitement though, soon became an obsession. I utilized AI so often that it had a number of negative effects on my life. As time went on, I began to understand that although AI might be entertaining and useful, it also has disadvantages. This experience got me to reflect about how AI can both help and hurt humans, especially when we face new issues in the future.

Productivity and economic growth have a strong connection with artificial intelligence (AI). AI has the ability to significantly increase productivity, which is essential for economic growth, according to several experts. According to the article, “Faster productivity growth allows the economy to grow more rapidly, and living standards to rise more rapidly, without generating excess inflationary pressures.” (Joe Seydl Senior Markets Economist & Jonathan Linden Executive Director, How AI can boost productivity and Jump Start Growth). This means that individuals can live better lives without worrying about price increasing as productivity rises. AI has been able to improve the U.S. economy's lack of continuous productivity gains since the 1990s. In accordance to the article, “if the trend holds”, economic data may show that AI has increased productivity by the end of the 2020s (see figure 1).

• Figure 1 - Timeline from innovation to productivity growth for major technologies, showing a significant reduction in the time taken for AI (2023) compared to the steam engine (1769), electricity (1880), and PCs/Internet (1981). (Sources: Crafts (2021), NBER, BEA, Haver, IMF, J.P. Morgan Private Bank.)

In the past, the advantages of technology advancements have been moderate. For example, the steam engine didn't increase production for more than 60 years. But the time period has gotten shorter with each new technological advancement, like the personal computer. According to the article, “It took 15 years for the personal computer to increase the economy’s productivity. AI could do it in seven.” (Joe Seydl Senior Markets Economist & Jonathan Linden Executive Director, How AI can boost productivity and Jump Start Growth). This demonstrates how AI has the ability to significantly increase productivity far more quickly than earlier technologies (see figure 1).

Furthermore, AI has the potential to significantly boost the economy. A total productivity boost of about 17.5% or approximately $7 trillion more than current GDP projections, may result from replacing 50% of high risk or valuable roles over the next 20 years, according to estimates. Raising living standards and promoting economic growth depend on this potential productivity boost (see figure 2).

• Figure 2: Projected U.S. labor productivity growth from 2023 to 2043, comparing the AI-induced potential upside with the CBO baseline. Automating half of vulnerable jobs could result in a $7 trillion increase in economic potential over 20 years. (Source: MF, J.P. Morgan Private Bank.)

The development of AI technologies presents a double dilemma: it has the ability to generate new job opportunities while simultaneously presenting an opportunity to displace many existing ones. According to Goldman Sachs, AI has the potential to eliminate almost 300 million full-time jobs worldwide. (Kelly, Goldman Sachs predicts 300 million jobs will be lost or degraded by Artificial Intelligence 2024). However, PwC research indicates that as economies grow and change, new employment may be generated to make up for any job losses brought on by automation. (World Economic Forum, Don't fear AI. Tech will lead to long-term job growth). The International Monetary Fund (IMF) also points out that although AI may have an impact of 60% of occupations in developed economies, adopting AI might increase productivity approximately half of these jobs. (Georgieva, Ai will transform the global economy. let's make sure it benefits humanity. 2024). The total impact on employment may therefore be more complex, with new positions coming in response to technology improvements, even while job displacement is a serious worry.

Concerns about growing inequality are raised by AI's impact on income distribution. The people who own and control AI technologies aim to gain disproportionately from their increasing use. According to an OECD report, investors and tech companies would be the main beneficiaries of wealth created by AI, which might increase economic inequality. (Tai, The impact of Artificial Intelligence on Human Society and Bioethics 2020), (Artificial Intelligence and wage inequality | OECD). According to the IMF, industries that use AI technology will probably see a greater influence on capital income, which will result in concentration of wealth among people who own holdings in these sectors. (Authors: Otaviano Canuto…, How will artificial intelligence affect the economy? 2024). The necessity for measures targeted at equal distribution of wealth is highlighted by the possibility that this trend will lead to a “M” shaped wealth distribution, where the wealthy get richer at the cost of lower income groups.

Significant investments in education and skill development are necessary for successfully overcoming the challenges presented by AI. The necessity for a workforce with the necessary skills is highlighted by the World Economic Forum's projection that by 2025, AI developments might provide over 97 million new jobs. (15 jobs will AI replace by 2030? 2024). But in order to make this transformation, approaches to learning will need to change to emphasize STEM education, critical thinking, and adaptability. According to a study in the Journal of Economic Behavior & Organization, generative AI can provide individualized learning opportunities, which could help those in need close educational inequalities. However, there are worries that unequal access to these innovative tools could worsen already-existing gaps in educational achievement. Experts highlight that in order to make sure that curriculum meets the demands of the future labor market, educational institutions must work with companies and businesses. In order to reduce job losses brought on from automation, the IMF emphasizes the significance of creating comprehensive retraining programs for workers who are at risk. (Georgieva, Ai will transform the global economy. Let's make sure it benefits humanity. 2024). (Ai-enabled Personalized learning: Empowering management students for improving engagement and academic performance) Therefore, even while AI has the potential to improve education, it also calls for a proactive strategy to guarantee fair access and skill development for all groups.

AI's social consequences go beyond financial indicators to include moral issues and the well-being of society. Concerns about privacy, data security and algorithm bias becoming more and more important as AI technology is incorporated into everyday life. While AI can increase efficiency, it also raises ethical questions about responsibility and transparency in decision making processes, according to the Simplilearn report. (Simplilearn, Unraveling AI Ethics: A comprehensive guide 2024). Furthermore, there is a considerable chance that AI could increase already-existing disparities; those who are able to take advantage of AI technology might realize gains in productivity and income, while those who are unable to adjust might fall behind. On the other hand, some experts believe that AI has the potential to be a socially beneficial technology that enhances access to services like healthcare and education. Generative AI, for example, could improve diagnostic skills. This contradiction, however, raises the concerns of who gains from these developments and how inclusive policies might be formed. The IMF states that in order to successfully address these disparities, nations must set up extensive social safety nets and provide retraining programs for people who are at risk. (IMF chief highlights the need for retraining and safety nets amid AI-driven job changes 2024). As I think back on my experience with AI, I see both its potential for transformation and its inherent risks. The knowledge of how quickly technology may impact life, both favorably and unfavorably tempered my initial enthusiasm. Experts agree; although many support the use of AI to increase creativity and productivity, they also worry against its unchecked application, which may result in job displacement and greater inequality. Daron Acemoglu, for example, highlights that “to support shared prosperity, AI needs to complement workers, not replace them,” underscoring the need for policies that place equal emphasis on technology innovation and human capital. The viewpoint supports my view that a balanced strategy is essential; we must maximize AI's potential benefits while avoiding any potential drawbacks. In conclusion, humans are at an intersection where artificial intelligence can either be a blessing and a curse. Unquestionably, it can promote economic expansion and open up new avenues for opportunity, but it also brings with it socioeconomic problems like job loss, income disparity, and ethical issues. As we proceed toward a future that is becoming more automated, it is critical that educators, legislators, and business executives work together to design policies that prioritize skill development and encourage fair access to technology. We can only make sure AI is a tool for shared prosperity rather than a cause of separation by putting such concentrated effort into it.

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"Image Title or Description." Future, 2025, https://cdn.mos.cms.futurecdn.net/nsKB4mLWHDoiFhzJMJzyCa.jpg. Accessed 7 May 2025.

Credits - Sofia Dantas