Analysis of the Mechanism of High-quality Economic Development

by Artificial Intelligence Technology from the Perspective of Factor

Upgrading

Zhaogong Lin

Institute of economics and trade, Shan Dong Management University, Chang Qing, Jinan, Shandong, China

Keywords: Artificial Intelligence Technology, High-Quality Economic Development, Cobb Douglas Function, Factor

Upgrading.

Abstract: This paper through the literature reading method, analysis the mechanism of how artificial intelligence

technology to promote the high quality development. Through the analysis we draw a conclusion that artificial

intelligence technology can enable production factors and form intelligent labor, intelligent capital, intelligent

land, intelligent information. On the basis of the intelligent production factors, industrial upgrading, structural

optimization, economic growth, policy optimization, management optimization as the characteristics of the

high-quality economic development become a reality. With the help of Cobb Douglas function, the equation

of artificial intelligence technology promotes high-quality economic growth is constructed. For analysis, three

suggestions which include to achieve core technology breakthroughs of artificial intelligence technology,

create a good environment for the development of AI enterprises, and accelerate the integration of AI

technology and production factors should be put forward.

1 INTRODUCTION

The report to the 19th National Congress of the CPC

clearly stated that promoting the deep integration of

the Internet, big data, artificial intelligence and the

real economy serves as an important measure for

China to deepen supply-side structural reform, build

a manufacturing power, and promote high-quality

economic development. As a comprehensive

technology, artificial intelligence technology is of

meaningful to promote high-quality economic

development. In this context, this paper analyzes and

studies the mechanism of how artificial intelligence

and factor upgrading to promote the high-quality

development.

2 JOURNALS REVIEWED

At present, there are many research categories on

artificial intelligence technology. Some studies

believe that artificial intelligence technology will

improve human productivity. With the development

and application of artificial intelligence technology,

the influence of technology on people has gradually

deepened, which not only greatly improves the work

efficiency and the production efficiency, but also can

greatly enhance individual productivity (Li 2018).

Human-machine fusion technology brings enhanced

intelligence. Human-machine fusion technology can

learn from each other and form a more intelligent

system jointly, demonstrating a huge space that can

be developed (Pan 2019).

After affirming the improvement of production

efficiency of artificial intelligence technology, some

studies have further analyzed the impact of artificial

intelligence technology on high-quality economic

development. Artificial intelligence technology

promotes economic development in four ways. First,

artificial intelligence techonlogy replaces labor,

expands the connotation of labor, increases the labor

supply, and enriches the labor wealth; artificial.

Second, artificial intelligence technology enables the

three major industries to improve production

efficiency. Third, artificial intelligence technology

creates consumer surplus and improves social

welfare. Fourth, artificial intelligence enables the

government, correct government failure, improve

government efficiency, and then correct market

Lin, Z.

Analysis of the Mechanism of High-quality Economic Development by Artiﬁcial Intelligence Technology from the Perspective of Factor Upgrading.

DOI: 10.5220/0011157800003440

In Proceedings of the International Conference on Big Data Economy and Digital Management (BDEDM 2022), pages 72-76

ISBN: 978-989-758-593-7

failure and improve economic efficiency (Cheng

2021).

Some scholars analyze the resource

agglomeration effect and talent agglomeration effect

of artificial intelligence technology. For both the

short-term analysis or the long-term analysis, the

development of artificial intelligence industry has a

strong impact on the development of China's

economy, and the development of mega cities, thanks

to the strong resource aggregation and talent

gathering effect and the strong AI production chain,

further enhance the degree of production automation

and intelligence of the regional economy. It will bring

China's economic development to a higher quality,

but at the same time, it also expands the differences

of the regional economic development (Chen, Tang,

2021).

In addition, some scholars have analyzed the

mechanism of artificial intelligence technology for

high-quality economic development from the

economic characteristics of artificial intelligence

technology. Artificial intelligence technology has the

economic characteristics of permeability, synergy,

substitution, creativity, and the mechanism of

artificial intelligence in promoting high-quality

economic development can be summarized as the

expansion effect, enabling effect and activation effect

on the three types of industries. Among them, the

expansion effect of core industries and the enabling

effect of fusion industry build a dynamic cycle

process of promoting high-quality development,

while the activation effect of potential related

industries promotes high-quality economic and social

development by providing non-matching, non-

intensive, non-neat and unfair problem solutions

(Guo, Fang, 2021). To sum up, the existing literature

mainly focuses on the combination of artificial

intelligence technology and human beings to improve

the production efficiency, and then promote the high-

quality development, the agglomeration effect

brought by artificial intelligence technology

promotes the high-quality development and the

industrial development brought by the economic

characteristics of artificial intelligence, thus

promoting the high-quality economic development.

Therefore, it can be seen that the mechanism of

artificial intelligence technology to promote high-

quality economic development is mainly

concentrated on the macro level. The existing

research explores the essential factors of artificial

intelligence technology to promote economic

development is rarely. Therefore, with the help of

Cobb Douglas production function, this paper studies

the impact of AI technology on production factors,

and then analyzes the mechanism of AI technology

on high-quality economic development.

3 ARTIFICIAL INTELLIGENCE

TECHNOLOGY AND

PRODUCTION FACTORS

UPGRADING

As a permeable, coordinated, alternative and creative

technology, artificial intelligence technology can

deeply affect all aspects of economic development,

such as industrial upgrading, product upgrading, and

resource cohesion. Under the four-sector economic

system, GDP accounting: GDP= consumption +

investment + government purchase + net export. This

accounting method mainly calculates GDP growth

from the perspective of economic expenditure, and it

does not explore the root cause of economic

development. In this paper, based on the analysis of

the literature, the main logic is shown in Figure 1.

Figure 1. Influence of AI technology on economic development

Analysis of the Mechanism of High-quality Economic Development by Artiﬁcial Intelligence Technology from the Perspective of Factor

Upgrading

As shown in Figure 1, simply do the following

analysis.

3.1 Artificial Intelligence Technology

Optimizes Labor Factors of

Production

The impact of AI technology as an epoch-making

technology on the labor force is profound and long-

lasting. First, it will change the main way of labor,

instead of "no one does" "unwilling to do" "difficult

to do" labor, reduce the physical burden, mental

burden, thus essentially liberate labor force, thus

labor have time and energy combine with the

artificial intelligence technology, so as to realize from

the basic labor force to intelligent labor force.

Second, the penetration of artificial intelligence

technology allows workers could "learn by doing",

affecting the way of thinking, so as to realize the

upgrading and reconstruction of the self-labor force,

and the intelligent labor force could be an reality.

3.2 Artificial Intelligence Technology

Optimizes Capital Factors of

Production

Technology and capital could mutually promote each

other. Technology can promote new forms of capital

and improve the return on capital, while the

circulation and operation of capital can in turn

promote the diffusion and application of AI

technology. With the continuous development of AI

technology, it also plays an increasing role in the

process of capital operation. Capital can change its

own form and operation mode with the development

and application of AI technology to adapt to the

development and changes of economy and society. It

is under the promotion and influence of technological

progress that the ability of capital to adapt to it is

constantly enhanced, and then it can develop and

maintain strong vitality in the long term. Driven by

artificial intelligence technology, the integration of

artificial intelligence technology and big data can

make the utilization of capital smarter and smarter,

and the capital can be accurately put so as to achieve

higher capital utilization rate and return on capital.

Driven by artificial intelligence technology, the

traditional characteristics of capital factors of

production have become intelligent capital.

3.3 Artificial Intelligence Technology

Optimizes Land Factors of

Production

Land "is a natural complex on a certain area of the

surface, including geological, landform, climate,

hydrological, soil and other natural elements of

vegetation". Driven by artificial intelligence

technology, geological analysis, hydrological

monitoring, geomorphological exploration, soil

composition, vegetation analysis and so on are also

becoming more and more scientific, thus the accurate

planning and accurate use of land use could be an

reality. The remote sensing, GIS geographic

information system, GPS global positioning system

and other high-tech technologies are organically

integrated with geography, agriculture and other

disciplines, the digital and intelligent agricultural

production process become an reality. We will

combine big data and artificial intelligence with

characteristic agriculture such as tea, fruits and

vegetables, promote the development of new models

such as high-efficiency mountain agriculture and

agricultural O2O, and promote the integrated

development of agricultural products planting and

processing based on digital technology, supply chain

coordination and rural tourism. The combination of

land and artificial intelligence technology seems to

install a brain to the land, making the utilization of

land become smart and forming intelligent land

production factors.

3.4 Artificial Intelligence Technology

to Optimize Information Factors of

Production

Traditional factors of production generally include

land, capital and technology, but with the

development of economy, information has become

more and more important new factors of production.

Because information has analytical, disseminated and

usable characteristics, it plays an important role in

production and economic development. Therefore,

information can also be considered a factor of

production. Under the development of artificial

intelligence technology, the integration of

information and AI technology makes the use,

dissemination and replication of information more

scientific, reasonable and intelligent. Artificial

intelligence technology has realized the efficient and

scientific use of information, making the policy

formulation more reasonable and the management

mode more reasonable, thus realizing the

optimization of information production factors.

BDEDM 2022 - The International Conference on Big Data Economy and Digital Management

4 INTELLIGENT PRODUCTION

FACTORS AND HIGH-

QUALITY ECONOMIC

DEVELOPMENT

The optimization of artificial intelligence technology

to labor, capital, land, information and other

production factors brings about high-quality

economic growth characterized by industrial

upgrading, structural optimization, economic growth,

policy optimization and management optimization.

High-quality economic growth promotes high-quality

economic development. Through the Cobb-Douglas

production function (1).

ββ1

t KLAY

−

= ）（

(1)

Among them, formula medium Y is the total

industrial output value, A (t) is the comprehensive

technical level, L is the invested labor force, and K is

the invested capital.

Based on the analysis of this paper we improve

the Cobb Douglas production function (2).

AIAIAI

SKLTHG

γβα

(2)

Among them, HG represents high-quality

economic growth and T

represents the intelligent

information, L

represents the intelligent labor, K

represents the intelligent capital, S

represents the

intelligent land, and α+β+γ=1.

Driven by intelligent elements, industrial

upgrading, economic growth, policy optimization

and management optimization have led to high-

quality economic development.

5 POLICY SUGGESTIONS

5.1 Realize Breakthroughs in the Core

Technologies of AI

We will gather superior teams, focus on the major

national strategic needs, and strengthen demand-

oriented basic research. We will strengthen multi-

path exploration, cross-integration and disruptive

technology supply of cutting-edge technologies. We

will encourage diversified subjects to participate in

future research, support universities and research

institutes to set up artificial intelligence technology

research institutes and AI colleges in areas with

prominent advantages in scientific and educational

resources and a strong industrial foundation, and

support large science and technology enterprises to

set up laboratories for artificial intelligence

technology and application research. Enterprises and

non-governmental organizations will jointly set up

artificial intelligence technology research awards to

reward groups and individuals that have made

breakthroughs in cutting-edge technologies and lead

innovative ideas.

5.2 Create a Good Environment for the

Development of Artificial

Intelligence Enterprises

We will carry out the reform of "running once at

most", so that the local artificial intelligence

technology industry has a good environment for the

development of the AI industry, reduce the approval

steps of intelligent economy enterprises as far as

possible, improve the service quality and efficiency

of regional governments, and shorten the examination

and approval time. Support will be given to financial

and tax policies to encourage the development of

smart enterprises.

5.3 Accelerate the Integration of

Artificial Intelligence Technology

and Production Factors

At the same time of the vigorous development of

artificial intelligence technology, timely promote the

integration of artificial intelligence technology with

labor force, capital, land, information and other

production factors, and actively build the intelligent

labor, the intelligent capital, the intelligent land and

the intelligent information, so as to realize the

comprehensive optimization of the economic

development of artificial intelligence technology. We

will gradually make artificial intelligence technology

a core factor of production and promote high-quality

economic development.

6 CONCLUSIONS

This paper, on the basis of previous analysis, analyzes

the mechanism of high-quality economic

development with the help of Cobb-Douglas

production function. This paper finds that AI

technology has realized the transformation and

upgrading of production factors by enabling labor,

land, capital and information production factors.

Labor, capital, land and information, under the

promotion effect of artificial intelligence technology,

have become the intelligent labor, the intelligent

capital, the intelligent land and the intelligent

Analysis of the Mechanism of High-quality Economic Development by Artiﬁcial Intelligence Technology from the Perspective of Factor

Upgrading

information, thus realizing the high-quality economic

development characterized by industrial upgrading,

structural optimization, economic growth, policy

optimization and information optimization. The high-

quality economic development will further promote

the optimization and improvement of artificial

intelligence technology.

REFERENCES

Chen, D.Y., Tang. Y.G. (2021) Analysis of the impact of

artificial intelligence industry on regional economic

development. Technology Management Research.

Commun.,2: 138-144.

Cheng, Ch.P. (2021) AI is ways to promote economic

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Commun., 3: 1-8.

Guo, Ch. X., Fang, A. (2021) Artificial intelligence

promotes high-quality economic development:

mechanism, problems and countermeasures. Guangxi

Social Sciences Commun., 8: 8-17.

Li, M. (2018) Artificial intelligence: Technology, Capital

and Human Development (doctoral thesis, Zhongnan

University of Economics and Law).

Pan, Y.H. (2019) Artificial intelligence: Focus on providing

new drivers for high-quality development. Smart

China. Commun.,7: 50-51.

BDEDM 2022 - The International Conference on Big Data Economy and Digital Management