How the AI boom was enabled by a 1970s economic revolution
How the AI boom was enabled by a 1970s economic revolution
https://theconversation.com/how-the-ai-boom-was-enabled-by-a-1970s-economic-revolution-276669
Publish Date: 2026-02-25 12:40:00
Source Domain: theconversation.com
Artificial intelligence is accelerating a global economic revolution that began back in the 1970s. Researching the impacts of AI on different sectors of society highlights an important parallel moment in history: the creation of the “service economy” in the US.
In 1972, amid a period of global turmoil, a group of OECD (Organisation for Economic Co-operation and Development) economists sought to reinvent how nations thought not only about wealth but the very purpose of society. They did this by proposing a broad new category of commerce: services.
It seems hard to imagine now, but until then economists had perceived and measured trade largely in terms of goods alone. Money was made by exchanging tangible, physical products (wheat, guns, butter). To become a rich nation, the wisdom went, you needed to add unique value to your raw materials (crops, iron) by turning them into more complex products (processed foods, steel) that gave you a competitive advantage over other countries.
Instead, this new category of services lumped together a diverse range of “intangible” jobs and social goods – from teaching and driving trains to social housing and water – in a huge new economic basket. It suggested there could be common standards by which to trade in them globally, creating metrics that offered a new source of wealth for investors.
While it would be two decades until the General Agreement on Trade in Services became a cornerstone of the newly formed World Trade Organization in 1995, the reimagining of jobs and social goods as tradeable services had an immediate effect on nations around the world. It spurred a new wave of private enterprise, and changed how and why essential societal activities were provided.
It also enabled the rise of the generalist boss and the creation of the “CEO class”. To run complex sectors from public transport to healthcare required accepting a view of management as a skill divorced from the specifics of the activity…
