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Sir Christopher Pissarides:AI, FinTech, and national economic policies
Currently Regius Professor at the London School of Economics, Sir Christopher Pissarides is best known for winning the Nobel Prize in Economics in 2010. This honor came for his contributions to the theory of research frictions and macroeconomics. In his research, the British-Cypriot academic focuses on economic growth and policies, especially in regard to the labor market.
Additionally, in 2013 the scholar was knighted for his extraordinary services and contribution to economics sphere.
Sir Pissarides was invited by the American-based CFA Institute as keynote speaker for the “Taiwan Investment Conference.” The event took place on October 12 in the Mandarin Oriental Hotel in Taipei City.
Titled “AI Advisory and FinTech’s Impact and Opportunities for the Financial Industry and Professionals over the Next Decade,” Sir Pissarides’s speech provided many insightful remarks on how new technologies are changing our jobs and the environment at large.
After the speech,
BusinessNext/Meet had the chance for an exclusive interview with the inspiring academic.
An Inspiring Speech For AI and FinTech
For Sir Pissarides, the growing importance of artificial intelligence (AI) will see it become the base for most if not all future technologies. Be it FinTech, autonomous cars, or large-scale automation, AI will be one of the core elements driving technological and economic progress over the next decades.
At the same time, however, AI will potentially wreak havoc with traditional jobs. As automated processes and robots take over manufacturing and service industries,a growing number of both white and blue-collar workers is facing unemployment.
According to Sir Pissarides’s data, the tasks that will almost certainly disappear as jobs for humans are telemarketers (99%), loan officers (98%), cashiers (97%), legal assistants (94%), taxi drivers (89%), as well as fast food chefs (81%). In short, work that is easily automated and requires no special skills is not future proof.
On the other hand, jobs that necessitate special knowledge and the ability to empathize with fellow human beings are, for the foreseeable future at least, secure. For instance, mental health therapists, social workers, doctors, or clergy are among the least- affected category.
One of the potential consequences of these developments is the systemic disadvantage it entails for developing countries.
Reliant on the very jobs that automation and AI are threatening right now, unprecedented unemployment rates may emerge in these societies in the near future that put both social welfare and the maturing of domestic markets at risk.
Wealthier societies, however, are less at risk as their labor markets are already shifting towards interactive jobs such as healthcare, education, and other services that rely on human skills.
The rise of FinTech
The financial sectors as it is could benefit immensely from AI. If applied correctly, the technology will drive the development of FinTech. However, Sir Pissarides warns that for these changes to take place financial institutions would have to let go of their traditional mindsets first.
Due to the conservative attitudes of banking houses and a deeply ingrained distrust of smart technologies, FinTech has not yet disrupted traditional working methods within the sector. Compared to other industries, FinTech is still waiting to pick up speed.
Once financial institutions overcome their fears, things will move much faster, Sir Pissarides asserts. With massive new means of funding from venture capitalists, FinTech-focused startups are going to impact the market. Sir Christopher is optimistic that as soon as traditional banking houses start collaborating more with FinTech startups and let the latter’s innovative ideas infuse their practices, FinTech is set to take off.
Government Is Key on Economic Growth Sustainably
As an expert on economic growth, Sir Pissarides naturally has a strong opinion on how to sustain development. For him, governments remain key for ensuring future economic stability.
For one, the government should be more proactive in encouraging development and investments in the private sectors. Additionally, public servants need to dedicate themselves towards fostering startups.
Startups have very little chances to make it on their own, the economist explains. They are thus in dire need of financial patronage, be it through public support or collaboration with established companies.
But Sir Pissarides also emphasizes the need for education. Governments need to set aside larger budgets for the public sector, with schools in particular being one key element of future success. By allowing more students to pursue their ideas, national societies will benefit immensely.
One means that is already adopted in the United States and Taiwan, among others, is public investments into research universities While the budgetary scales differ enormously, the policy to provide students with the means to create has produced encouraging results, Sir Pissarides asserts.
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