The task-based model - Excerpt:
- First, there is displacement, when an AI system replaces some of the tasks that were previously performed by humans. An example of this would be the book reviews that were displaced when Amazon adopted its automatic recommender (and laid off its book reviewers, although some have now made it back to the company). This will reduce demand for labor.
- Second, there is augmentation when an AI system increases the value of the tasks carried out by humans. An example of this would be Amazon's web development and inventory management tasks: each dollar spent improving its website and stocking many different titles creates a bigger return for the company thanks to its AI recommendation system. This will in general increase the demand for workers whose tasks are augmented.
- Third, there is capital deepening. New AI systems are an investment that increases the stock of capital that workers use, making them more productive and increasing demand for labor through the same mechanism as above.
- Finally, there is reinstatement, when the AI system creates completely new tasks such as developing machine learning systems or labeling datasets to train those systems. These new tasks will create new jobs and even industries, increasing labor demand.
