🤖 My chat (+transcript) with Google economist Guy Ben-Ishai on seizing the historic AI moment

Artificial intelligence may revolutionize the American economy, but whether we see that potential actualized depends on a few key factors: whether generative AI is a general purpose technology, whether the labor force makes a smooth pivot, how employers prioritize their resources, and whether the US chooses to take the lead in AI’s deployment. These are just a few of the topics I cover on the podcast today with Guy Ben-Ishai.

Ben-Ishai is the head of economic policy research at Google. He previously served as a principal at the Brattle Group and as chief economist in the office of the attorney general of the state of New York. He is also a co-author of the paper “AI and the Opportunity for Shared Prosperity: Lessons from the History of Technology and the Economy.”

In This Episode

* Is gen AI a general purpose tech? (1:22)

* Risks and benefits (7:46)

* Barriers to a boom (14:27)

* Investing in employees (19:16)

* Human-complimenting AI (25:29)

Below is a lightly edited transcript of our conversation

Is GenAI a general purpose tech? (1:22)

Pethokoukis: Do you have any doubt that generative AI, and perhaps machine learning more broadly, is an important general purpose technology that will eventually make a substantial and measurable impact in the economic statistics and productivity and economic growth?

Ben-Ishai; The immediate response is absolutely, but let me unpack that: Do I have doubts about the immense potential of the technology? No, and I'm saying that very confidently, which is uncommon for an economist. We put together the paper that you've initially cited at Google to look exactly at that question: When we say that AI marks a pivotal moment in human history, what does that actually mean for an economist? And I think the conclusion there that we're looking not in an ordinary technology, but rather at a general purpose technology, that is immense. That means that we're probably looking at the most transformative economic development of our generation. And to think, Jim, that the two of us are having a conversation about that today, that is historic. I feel incredibly privileged and lucky to think and work of these issues in our day and age.

But the second part of your question alluded to not the potential, but actually the actual impact. And if there's one takeaway from that exercise from the paper that we put together and from my conversation with so many academics and policymakers around the world, is that this is not just a watershed moment, it's not just a pivotal moment in human history, it's a fragile moment as well. This story can easily be a story of missed opportunity. I think that we so easily take for granted the fact that, yes, we will of course develop AI and deploy it and apply it very successfully. And it's so easy to get caught in the moment, particularly as the nation that advanced the science, I think somewhere in the back of the minds of all of us, there's that presumption that we will be the global leaders in deployment of AI. I am actually worried about that. To ensure that we are, it’s a tumultuous, fragile, and careful process that we’ve got to be really thoughtful about, with a lot of deliberate action about what we do, how do we proceed, and how do we ensure that we are indeed the ones that capitalize on the potential?

It's remarkable how quickly the narrative around American tech has shifted. Not long ago, Silicon Valley faced criticism for focusing on social media rather than groundbreaking innovations like the Apollo program or cancer cures. Now, they've unveiled generative AI, potentially the most significant technology of our era.

Regarding fragility, it's worth considering why AI might need special handling. Unlike the seamless diffusion of technologies like the internal combustion engine or electricity, AI seems more akin to nuclear power - a technology that was stifled by regulation. Do we need a proactive agenda to prevent AI's potential from being similarly constrained?

That's a great question, Jim. I'm so tempted to go back to your first part of the question about the importance of digital technologies, and economists get a really bad rap, but try to be a librarian these days. We tend to overlook the tremendous importance of information as a driver of economic growth in our economies. And even if you look just at small businesses and the tremendous opportunities that digital technologies have provided them. To think that a mom and shop store today can actually run a marketing campaign, analyze its customer base on large databases, export products to far markets, those are things that used to be the exclusive domain of just a few large companies that today are actually available broadly and widely through digital technologies. And maybe it's the fault of economists that we are not shouting off the tops of mountains frequently enough about the tremendous power of information and digital technologies and the accumulation of knowledge as a driver of economic growth.

The application of knowledge and intelligence — that seems to me to be pretty important.

I cannot agree more! And I think, to a great degree, it explains some of the tremendous optimism around AI as a technology that really reduces the barriers to interact with technology and democratizes its use in a way that we haven't seen before.

Risks and benefits (7:46)

We quickly shifted from marveling at AI's potential to