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Artificial intelligence: Implications for China

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Artificial intelligence, or the idea that computer systems can perform functions typically associated with the human mind, has gone from futuristic speculation to present-day reality. When the AlphaGo computer program defeated Lee Sedol, a nine-dan professional master, at the game of Go in 2016, it signaled to the world that it is indeed possible for machines to think a bit like humans—and even exceed their capabilities.

Thanks to advances in data collection and aggregation, algorithms, and processing power, computer scientists have achieved significant breakthroughs in artificial intelligence. Where computer systems once had to be programmed to execute rigidly defined tasks, they can now be given a generalized strategy for learning, enabling them to adapt to new data inputs without being explicitly reprogrammed. Today many machine learning systems have already been developed for commercial use. The applications are tremendously varied, and adoption is growing rapidly in sectors such as finance, health care, and manufacturing.

Because they can dramatically boost productivity, AI technologies may have a disruptive impact on China’s economic growth and on its workforce. A McKinsey Global Institute study published earlier this year estimated that half of all work activities in China could be automated, making it the nation with the world’s largest automation potential. Hundreds of millions of Chinese workers could be affected, and jobs made up of routine work activities and predictable, programmable tasks will be particularly vulnerable. While impact on the labor market is likely to be gradual at the aggregate level, it can be sudden and dramatic at the level of specific work activities, rendering some jobs obsolete fairly quickly. Overall, AI will raise the premium placed on digital skills while reducing demand for medium- and low-skill workers, potentially exacerbating income inequality.

Source : McKinsey Global Institute

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