Humans, Economics and AI

The Atomic Human Perspective

Neil D. Lawrence

Seminar Series, Ministero dell’Economia e delle Finanze, Via XX Settembre 97, Roma

Artificial General Vehicle

Artificial General Vehicle

Philosopher’s Stone

The Attention Economy

  • Human intelligence is locked-in
  • This makes it a bottleneck

Herbert Simon on Information

What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention …

Simon (1971)

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Human Capital Index

  • World Bank Human Capital Index 2020
  • Measures health and education

Ranking

  • UK 0.78 11th globally
  • Italy 0.73 30th globally
  • US 0.70 35th globally
  • China 0.65 45th globally

Productivity Flywheel

Inflation of Human Capital

  • Strength in Human Capital double-edged sword.
  • Automation creates efficiency.
  • But skills risk becoming redundant.

Inflation Proof Human Capital

  • Does automation totally displace the human?
  • Or is there an irreducible core?

Uncertainty Principle

  • Machines rely on measurable outputs
    • Quantified aspects of humans easier to automate
    • Essential aspects of humanity are the hardest to measure
  • Implies: atomic human is difficult to quantify

Homo Atomicus

  • Where we have homo economicus the machine can step in.
  • Quantitative vs Qualitative gap
  • Homo atomicus is …
    • Not in A-level results
    • Not in hospital waiting lists
    • In the quality of human interaction

New Productivity Paradox

  • Current productivity flywheel relies on measurement to translate innovation into productivity.
  • Without measurement how does the wheel spin?

Supply Chain of Ideas

  • Ideas flow from creation to application like physical supply chains
  • Parallels with traditional economic supply chain management
  • Particularly relevant for IT and AI solutions

Supply Chain of Ideas

  • Current imbalance between supply and demand sides
    • Mismatch between macroeconomic interventions and microeconomic need
  • Over-Focus on solutionism
    • technologies/companies
  • Under-focus on real-world needs … disconnect between government and citizens … disconnect between companies and customers

Supply Chain of Ideas

  • Need to map idea problems demand to idea supply
  • Need to understand … problems (demand) … current “stock” of solutions (supply)
  • Requires active management of idea resources
  • Shape supply to meet demand

AI cannot replace atomic human

Attention Reinvestment Cycle

Cromford

Distretti Industriali

  • 18th Century Emilia Romagna: Silk, Paper
  • The Black Country
  • Exhibit: Strength in Community Strength in Diversity Poor economies of scale
  • Requires: Strength in Europe

Implications for Economic Policy

  • AI as a productivity shock: the standard framing
  • Risk: macro metrics hide micro realities
  • Human capital: investment, not just input
  • Public sector role: building absorption capacity

Wicked Problems

Example: Cambridge Approach

ai@cam

How ai@cam is Addressing Innovation Challenges

  • A-Ideas (across 20 departments)
  • Policy lab (with Bennett, Minderoo)
  • HPC Pioneer projects (with RCS, C2D3)
  • Accelerate programme (Schmidt Sciences funded)

Innovation Economy Conclusion

  • Interact directly with micro-demand
  • Release quality attention
  • Reinvest human capital in more innovation

Thanks!

References

Lawrence, N.D., 2024. The atomic human: Understanding ourselves in the age of AI. Allen Lane.
Simon, H.A., 1971. Designing organizations for an information-rich world. Johns Hopkins University Press, Baltimore, MD.