Laurent Carbonneau: Canada has economic problems. AI can help
Laurent Carbonneau: Canada has economic problems. AI can help
Compared to peer countries, Canadians are working a lot to earn modest incomes, even accounting for services like health care and education.
The House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities is currently studying the potential impacts of artificial intelligence on the Canadian labour market.
On Wednesday, Nov. 1 I testified at the committee. This column is based on my remarks given to the committee, and is a message all policymakers need to hear.
By: Laurent Carbonneau
It is good that artificial intelligence is getting scrutiny from politicians.
A new, genuinely general-purpose family of technologies such as AI could well have impacts on the world of work and the economy like those created by industrialization and electrification. Those transitions posed profoundly difficult policy challenges to governments — challenges that many were not able to meet equitably.
With that said, it is very premature to worry about large-scale job losses. In fact, we should be working to embrace AI in a responsible way as a means to solve Canada’s stubborn economic challenges.
If you take a look at the big picture, the most concerning issue for Canada’s economy is the productivity of Canadian businesses and their immense appetite for more labour. This is not normal for advanced economies, and we should take a look under the hood of Canada’s overall economic picture.
Canada’s productivity — GDP per hour worked — is below the OECD average, just behind Italy and just ahead of Turkey and Spain. We’re even worse than them on work-life balance; we’re tied at 30th with the United States for leisure time. Our net income, counting taxes paid and services like health care received, has us 13th in the world, behind rich countries like the U.S. but also small economies like Belgium.
Canadians are working a lot to earn modest incomes, even accounting for services like health care and education. And according to recent Statistics Canada data, productivity has actually just dipped below where it was in 2018.
Whatever policy issues you care about — poverty, climate change, Indigenous reconciliation, or just quality of life — those problems are easier to solve if we are richer and more productive as a country.
Nearly 75 per cent of intellectual property rights generated through the federal government’s Pan-Canadian AI Strategy are owned by foreign entities, including American tech giants such as Uber, Meta and Alphabet.
AI is, fundamentally, a family of technologies that makes both labour and capital more efficient. As a country, when we see an opportunity to make business more efficient and our economy more productive, pursuing that opportunity should be a priority!
While AI is a novel technology, it does not defy the general way that innovation economics works. Companies that are commercializing new innovations, particularly in digital technologies, succeed because they own intangible assets like patents that exclude rivals, they control vast amounts of data, and they leverage network effects to make their products and services more useful to users. Because of those fundamental drivers, today’s innovation economy is dominated by superstar firms equipped with the IP assets, data and networks they need to fend off competitors.
AI is a heavily IP and data-dependent business. The successful AI-driven businesses of the near future will replicate the winner-takes-most pattern. The global AI sector is currently valued around $200 billion dollars and by 2030 will likely expand to around $2 trillion. Canada is well-positioned in the industry in terms of highly-qualified personnel and leading research, but thus far we’ve struggled to create superstar companies.
The benefits created from government investment in research and training, including intellectual property, are accruing to firms outside of Canada — for example, nearly 75 per cent of intellectual property rights generated through the federal government’s Pan-Canadian AI Strategy are owned by foreign entities, including American tech giants such as Uber, Meta and Alphabet.
What’s worse, Canada’s AI talent pool has actually shrunk by nearly 20 per cent over the last three years. And this is showing up in low rates of adoption: 48 per cent of Canadian companies report not using any AI, compared to 36 per cent in the US, 38 per cent in the U.K. and 39 per cent in France.
It is still unclear what AI will mean for the future of work and broad employment patterns. AI is an emerging technology, or a series of them, and it’s too soon to say with any confidence what exactly it will mean for humanity. This, of course, was also true at the dawn of the industrial and electric eras, and we all can see today how much our lives were changed, and improved, by those developments, but also how many challenges both posed for our societies and governments.
As we enter this new technological race, one thing that is immediately clear is that in a potentially era-defining niche in a winner-takes-most sector, Canada cannot afford to be a late adopter of AI with little domestic capacity. Canada already has major economic challenges that we have not done enough to address. AI may be exactly what we need to solve some of these long-standing challenges, while also ensuring that we have a meaningful role to play in a field that could come to define the 21st century. We must seize this moment. Our only other choice is stagnation.
Laurent Carbonneau is director of policy and research at the Council of Canadian Innovators.
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Laurent Carbonneau: Canada has economic problems. AI can help
I think the decrease in output is less related to adoption of AI and more related to the coddling that has occurred as the far left beliefs have swept through society. People are arguing on facebook about universal basic income because they believe that there isn't enough work to go around, and that it would somehow solve all their financial woes, rather than seeking a job, furthering their training, and working hard. I know this may sound harsh, but I've lived in poverty and relied on government assistance for many of my early adult years. And yet - I was able to move myself out of that position through hard work and determination, despite disability significant enough to have led to me collecting CPP Disability for many years. Education is power. Motivation and believing that you can change your world (internal locus of control) is power.
Could AI have benefits? Sure, maybe. But will those benefits appear in the absence of individuals who are motivated to make their own decisions and control their own lives through hard work? No. I had a friend many years ago, chronically unemployed, because she wasn't willing to work for the wage I was working at. She chose to not work, and really not even look for work, because nobody would pay her enough.
When people think they're "too good" to do certain types of work, and that spreads through society, THAT is what reduces GDP and leads to many unfilled jobs. Yes, inflation is a problem. Unemployment, at the moment and for a few years now, has not been a problem of lack-of-jobs, rather it has been lack of people willing to take the jobs after the amount they were able to make through the government's covid payment program. SO many problems we are facing economically right now can be traced back to the covid money having been accessed with too much ease, by many who didn't qualify for it, and then all that extra money went into the economy and led to demand that far outpaced supply - leading to inflation and increasing the money supply at the same time as the government was running large deficits and decreasing the supply of loanable funds.
My work is using some AI in a limited capacity - it's actually very limited in what it can do well so it's not heavily used. BUT I don't think lack of AI is the economy's biggest problem. The lack of sufficient numbers of people who are willing to take responsibility for themselves and work hard is the larger problem. And that is one that will require a shift in societal values to address - AI won't be able to fix that. It starts with educators who don't undermine capitalism by promoting command economy ideas. and with legacy media who does a better job at providing context when reporting corporate earnings rather than just giving the accounting profit and making people feel that CEO's are sitting on billions of profit because of inflation. The average person doesn't understand how the economy works, or that there are economic costs to running a business that don't show up on a balance sheet - and these are important things.
My apologies, that I don't have time yet to read your article as I am working hard at 72 making carbon untaxed firewood for heating. I can take a break to respond to the headline. The Canadians who are doing what they are supposed to be doing are all working hard. Some of the remainder are being overly coddled, enabling their "busy" work - read free drugs, activism, misspent public funds and political capital. Therein lies much of the issue. Always follow the money trail.