Prof. Acemoğlu: "AI can unlock the door to many opportunities for Turkey"

In his presentation during the 37th annual meeting of Koç Group executives, Dr Daron Acemoğlu highlighted six major global trends that he believes will dramatically reshape the future.
 
In a presentation made at the 37th annual meeting of Koç Group executives, Professor Daron Acemoğlu warned that six major global trends will shape the future and said that they posed both challenges and opportunities. “I believe that while these six global trends will upend the world order and pose major challenges, they will also present major opportunities for every country, especially Turkey” said Dr Acemoğlu, adding “Briefly put, these six trends are: automation and artificial intelligence, along with the inequality they can lead to; demographic change as populations age; climate change; macroeconomic imbalances; globalization; and the crisis of democracy.”
 
“Countries don’t need to experience poorer macroeconomic performance just because they’re aging faster”
Noting the demographic change can be transformed into a opportunity through automation, Dr Acemoğlu said “The average age of the world’s population is rising. We’ve been seeing this in countries like Japan, South Korea, and Germany for some time but the rest of the world is also getting older. No country–including Turkey–is truly prepared for this. This too could be an opportunity however. Countries don’t need to experience poorer macroeconomic performance just because they’re aging faster. In fact, we’re seeing that investment in automation is on the rise in aging societies and that automation can lead to big improvements in productivity when used appropriately. The key point is that when we look at South Korea, Japan, and Germany, we see that they’re using automation in ways that boost productivity.”
 
“Globalization hasn’t ended and it isn’t going to; it’s evolving”
Pointing to structural changes currently taking place in globalization, Dr Acemoğlu said “The world system relies on globalization. We know this. But we also know that the impact of the complex supply chains that have emerged over the last three decades on productivity and stability has been both good and bad. What we’re seeing today is that globalization “as we know it” is slowing down. One of the reasons for this is the growing perception that complex supply chains are fraught with risks. Another is that competition between the United States and China has intensified; thus there has been a significant decline in Chinese imports into the US for example whereas we’re not seeing anything like that in US trade with other countries. What we are seeing though is that supply chains are being “localized”, which causes problems for countries such as Turkey whose economies rely on exports. But even here, there are opportunities. This “new” globalization will also give rise to new possibilities; but those opportunities will also arise from potential gains in productivity. Globalization hasn’t ended and it isn’t going to; it’s evolving. And as it evolves, it’s likely that properly productive export products that make proper use of technology will gain importance.”
 
“Democracy helps power economic growth”
According to Dr Acemoğlu, democracy plays a critical role in economic development. “Democratization accelerates countries’ economic growth. When we look at countries emerging from dictatorial regimes for example, we see that they may have a tough go of it for the first four or five years but after that, they begin growing rapidly. Over the ensuing two decades, the same countries see their GDPs expand by about 20%. What I’m saying is that democracy helps power economic growth. That said, democracy also seems to be undergoing a crisis nowadays. There are many reasons for this but one of the most important is that popular support for democracy is in decline. The world’s democracies have been underperforming for the last two decades. To reverse the decline in democracy’s popularity, people need to see that democracy is generating economic growth; that it’s reducing inequality, delivering political stability, and not enabling corruption. Another important reason is the manipulation of people’s behavior through disinformation. Democracy thrives on information but it is at the mercy of those who control the information. The more manipulation there is, the less democracy works and the less support there will be for it.