What does AI mean for GDP?
All great points! AIs might be able to augment and accelerate the rate of innovation and the creation of new ideas, but unless the machines themselves will also consume the fruits of those ideas as we humans do, there are limits to how much AIs can accelerate economic growth.
Production and scale are very underappreciated in the context of innovation. Many products today have high initial capital investment requirements and low marginal costs. Without a sufficient market (i.e. a shrinking population) market saturation will eventually reach a point where that initial investment is no longer justified. I touched on this in an essay some while back: https://www.lianeon.org/p/we-dont-have-enough-people
Also underappreciated is the synergy between production and innovation. Producing and selling a product illustrates ways that it can be improved in a synergistic feedback loop. If we are just producing more and more things without sufficient consumers to “test” them, we are not innovating as quickly as we could, thus running into diminishing returns that will inevitably prevent ‘explosive’ growth.
I am adding this piece to my “Recommended Reads” section at Risk & Progress, fantastic work.
Fantastic essay, bookmarking this one.