Artificial intelligence (AI) will help economies grow, but will also require greater investment in social security safety nets, according to a new report from Credit Suisse.

Produced in conjunction with several economic, social policy and technology professors, the document - published at this week’s Davos summit - delves into the impact of technological progress on employees, businesses and society at large.

The first chapter looks at what technological change means for the future of work, concluding that contrary to popular belief, there will be no shortage of jobs in contemporary economies.

The World Economic Forum recently claimed that AI is likely to create double the number of jobs that are displaced by technological disruption within the next seven years.

Rafael Lalive and Daniel Oesch, professors in economics and sociology respectively at the University of Lausanne, commented: “Rather than a jobless economy, the two great challenges in the labour market may then be massive dislocation on the one hand and the distribution of productivity gains on the other.

“While technological change will not lead to the end of work, it will certainly displace people from occupations and sectors,” they added.

In August last year, Bank of England (BoE) chief economist Andy Haldane stated that “large swathes” of people in the UK risked becoming “technologically unemployed” due to AI making many jobs obsolete.

“We will need even greater numbers of new jobs to be created in the future, if we are not to suffer this longer-term feature called technological unemployment,” he commented.

In October, his boss at the BoE Mark Carney called for protections for workers from the pace of technological changes such as AI and machine learning, outlining the role businesses and governments will need to take to ensure that workers do not fall victim to social divisions created by technological disruption.

The second chapter assesses how to make AI transformation more likely to succeed by looking at past examples of innovative ways of investing in artificial intelligence, giving examples such as Amazon’s predictive shopping and the emergence of new entrants to the financial industry leveraging digital interfaces.

The third chapter sets out the need for economic security in the gig economy, with Giuliano Bonoli, professor of social policy at University of Lausanne, stating that the idea that social protection needs to be adapted to the changing nature of work is now firmly embedded in public debates.

“The challenge before us is to preserve the high levels of social cohesion and economic security achieved in the past in this newly emerging economic and technological world.”

A report from Microsoft last October found that two out of five industry leaders believe their current business models will disappear in the next five years due to the pace of AI-driven digital disruption.

It revealed that companies which have already deployed some form of automated or machine learning technology are performing five per cent better on factors like productivity, performance and business outcomes compared to those who have held back on AI technology.

The final section of the Credit Suisse report looks at the legal and ethical challenges posed by AI and discusses how modern computer technology will improve the working world and ultimately benefit people of future generations.

Urs Rohner, chairman of the board of Credit Suisse Group and chairman of the Credit Suisse Research Institute, concluded: “Big data and advances in computing power have triggered a technological revolution that have enormous bearing on the workplace and the labour market.

“Machines and robots are improving their capacities rapidly through AI and innovations in design and structure – how businesses navigate these changes whilst ensuring clients are connected, empowered and protected will be both the challenge and opportunity ahead.”

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