AI revolution will bring about significant changes in society

Could Generative AI’s (GenAI) ability to automate business models potentially lead to widespread job displacement?

Kenddrick Chan, senior policy analyst from the Tony Blair Institute

Instead of displacement, perhaps the better word to characterise GenAI’s impact is disruption. Yes, with the potential to automate business functions and transform business models, generative AI will pose a risk to some jobs. This is most likely for jobs that involve following a particular routine or are based on certain repetitive tasks.

However, they are also opportunities that will emerge with GenAI. The challenge here is for policy officials and decision-makers to help impacted workers transition to the evolving labour market.

What are the labour market ramifications of AI-driven automation, particularly in terms of traditional job loss?

GenAI is most likely to impact sectors such as manufacturing, retail, and administrative support. However, there is also potential for the AI-induced creation of jobs within those sectors. Such approaches also need to be nuanced - in regular circumstances, it is quite unrealistic for an administrative assistant to transition into a data science expert.

A more feasible pathway involves providing that person building up an understanding of AI tools and their uses, and ensuring that they are well-integrated into office workflows and running smoothly.

Another example is having product designers whose roles are disrupted by AI trained into specialists in harnessing AI-generated designs and deep understanding of consumer preferences and market trends to enhance product offerings.

While GenAI advances automation in production, could it exacerbate income inequality by widening the gap between the wealthy and low-income workers?

Yes, GenAI will exacerbate income inequality if the benefits are not distributed in an inclusive manner. Increased automation of production processes will likely lead to cost savings, and by extension, increased profits, for businesses.

While this benefits business owners and shareholders, this could lead to a widening income gap unless some of the cost savings and profits are channelled into reskilling impacted workers. Workers who have lost their jobs as a result of increased automation and have not been empowered with the right skillset to thrive in an AI-dominated world will face difficulties in securing comparable employment, resulting in a greater income inequality.

It is therefore important that both the public and private sectors implement the right policies that can help share the advantages of AI more equitably.

Despite generating new products and services, could GenAI lead to negative shifts in consumer market dynamics?

The answer is that it depends on the sector and nature of the businesses within it. Increased automation and efficiency can potentially lead to market saturation, where supply (of products and services) outpaces their demand, thereby reducing profitability.

However, that will be the case if a significant portion of businesses within the sector adopt GenAI at scale - meaning to the extent that they heavily rely on AI for their operations, leading to a homogenisation of products and services. This could diminish differentiation and innovation and drive down prices.

How robust are regulations in safeguarding against potential biases and discrimination embedded within AI algorithms, especially in applications such as hiring processes or law enforcement?

Other countries’ experiences demonstrate that ensuring neutrality and fairness in the development and use of AI systems is crucial, not only in recruitment and law enforcement but across all sectors. Although the current regulations in Vietnam still lack legally binding measures specifically aimed at safeguarding against potential biases and discrimination in AI, the government has taken steps to address those challenges.

Specifically, the government promulgated a national AI strategy in 2021, necessitating focused resources to create and develop AI products and services while refining the legal framework for managing AI.

Last month, the Ministry of Science and Technology provided a guideline for responsible AI research and development, requiring to ensure neutrality, transparency, security, safety, and controllability of AI systems. However, these guidelines are not yet legally binding but are intended to encourage more responsible AI research, development, and use.

Going forward, the government needs to continue researching, updating, and refining the legal framework for AI, looking at areas like personal data protection, privacy rights, human rights, and electronic transactions to ensure a favourable and sustainable environment for AI in Vietnam.

Compliance remains thorny issue for labour policies Shortcomings in legal policies on trade unions and other labour organisations are causing some difficulties for businesses during implementation.