Bob Homan: The rise of the 'thinking economy'

Bob Homan: The rise of the 'thinking economy'

Artificial Intelligence Arbeidsmarkt
Bob Homan (Cor Salverius Fotografie) 980x600

This column was originally written in Dutch. This is an English translation.

By Bob Homan, Head of the ING Investment Office

Let's talk about artificial intelligence (AI) again. After all, it is the big theme on the financial markets this year. And their salvation, because without the good returns of the shares associated with artificial intelligence it would have been a worthless year on the stock market.

Which fantasy has crept into AI stocks? Market researchers agree that artificial intelligence will have a major impact on our lives and certainly on the way we do our work. It is still unclear which applications we will find in addition to ChatGPT, but in general a number of tasks on the work floor will be easier to perform and ultimately with fewer people.

Artificial intelligence and productivity growth

Labor productivity should therefore increase. I personally think that this effect is limited. In a number of sectors, productivity will indeed increase significantly as a result of AI, but where will all the outsourced workers go? Creating jobs does not make the economy as a whole more productive.

Looking at recent history, productivity growth during the period of digitalization has been limited. At least, a number of sectors have certainly seen a significant increase in productivity, but at the same time many outsourced workers started working in sectors that are not doing well in productivity statistics. Consider the emergence of all kinds of (mental) coaches, trainers and (physio)therapists.

Automation and meaning

The rise of such professions is clearly demand-driven: people - especially in a time of digitalization - need personal contact and meaning. This has created a whole new 'attention economy', just as before mechanization took over a large part of the physical tasks in the work process and people who needed exercise took up sports.

Artificial intelligence is now removing some of the thinking work from the labor process. Nevertheless, I expect that people will retain the need to 'think for themselves'. So it wouldn't surprise me if, in addition to the 'attention economy', a 'thinking economy' also emerges. I dare not say what it will look like. But we may soon see initiatives, both at start-ups and at listed companies. Until then, an investment in companies that focus on artificial intelligence in other areas seems a no-brainer for any stock portfolio.