The way I hope for you to read this series is with an entrepreneurial eye
I appreciate this specific call to action, so I’ll kick us off. How will AI advances affect sectoral transformations moving people into the service sector? It will depend on where AI is a complement vs replacement for labor. In the complement case, high-quality instantaneous translations could dramatically expand the export market for services by eliminating English fluency as a barrier. In the replacement case, AI agents trained to write code could replace many routine contract software jobs.
Is there literature on skill gaps in LMI countries that is more granular than proxy metrics like years of schooling? That could be a good place to start to look for where AI complements could open up opportunities.
My guess is that AI adoption in developing countries will substantially lag adoption in rich countries. Firstly because this is true of most technologies, and secondly because AI adoption will be faster in places where labor costs are higher—ie rich countries with higher wages. This is why when US companies gained FDI access to China, they became less likely to use automation technologies. (Source) Even when it is adopted, within-country adoption lags will probably be substantial, and services are nontradable, so even if AI services are widely used in one city, they can’t exactly be exported from there. So my guess is that AI will not have a first order impact on the service sector in developing countries.
I appreciate this specific call to action, so I’ll kick us off. How will AI advances affect sectoral transformations moving people into the service sector? It will depend on where AI is a complement vs replacement for labor. In the complement case, high-quality instantaneous translations could dramatically expand the export market for services by eliminating English fluency as a barrier. In the replacement case, AI agents trained to write code could replace many routine contract software jobs.
Is there literature on skill gaps in LMI countries that is more granular than proxy metrics like years of schooling? That could be a good place to start to look for where AI complements could open up opportunities.
My guess is that AI adoption in developing countries will substantially lag adoption in rich countries. Firstly because this is true of most technologies, and secondly because AI adoption will be faster in places where labor costs are higher—ie rich countries with higher wages. This is why when US companies gained FDI access to China, they became less likely to use automation technologies. (Source) Even when it is adopted, within-country adoption lags will probably be substantial, and services are nontradable, so even if AI services are widely used in one city, they can’t exactly be exported from there. So my guess is that AI will not have a first order impact on the service sector in developing countries.