The current wave of technological change is unlike any that has come before. Its unprecedented speed, scale and scope will profoundly, and simultaneously, impact many sectors of the economy. In the industrial revolutions of the past 200 years, the economy and labor force adapted fairly well to disruptive technology. But we cannot assume that today’s (and tomorrow’s) workers displaced by technology—in particular, automation and artificial intelligence (AI) —will be rapidly or easily redeployed in new functions.
While we believe that technology could produce a significant boost to productivity, it is unclear whether a modern economy that is rapidly adopting automation and AI can deliver rising wages and rising productivity simultaneously. This creates complications in estimating the potential boost to trend GDP and in harnessing the positive—and mitigating the negative—effects across economies and societies. While we are probably a long way from a world in which artificial intelligence rivals human intelligence, we do not doubt that today’s technological revolution will spark far-reaching economic, social and geopolitical changes—perhaps eventually redefining the role of human labor in the workforce.
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ABOUT LONG-TERM CAPITAL MARKET ASSUMPTIONS
Our Long-Term Capital Market Assumptions are part of a deeply researched proprietary process that draws on in-depth quantitative and qualitative inputs from experts across J.P.Morgan Asset Management. We, and many of our clients, rely on the output as a foundation for multi-asset class investing.