· Global GDP will be 14% higher in 2030 as a result of AI
· Productivity improvements are expected to account for half of all gains to 2030.
Global GDP will be 14% higher in 2030 as a result of AI – the equivalent of an additional $15.7 trillion. This makes it the biggest commercial opportunity in today’s fast changing economy according to new research by PwC.
Drawing on a detailed analysis of the business impact of AI, Sizing the prize outlines the economies that are set to gain the most from AI.
AI will contribute $15.7 trillion to the global economy in 2030, more than the current output of China and India combined.
Labour productivity improvements are expected to account for over half of all economic gains from AI over the period 2016-2030. Increased consumer demand resulting from AI-enabled product enhancements will account for the rest. The greatest economic gains from AI will be in China (26% boost to GDP in 2030) and North America (14.5% boost), equivalent to a total of $10.7 trillion and accounting for almost 70% of the global economic impact.
Alistair Hofert, Intelligent Automation Lead for PwC South Africa, says: “The report highlights how AI can enhance and augment what enterprises can do, the value potential of which is as large, if not larger, than automation. It shows just how big game changer AI is likely to be and the impact it will have on our lives as organisations, individuals and society as a whole.”
Intelligent Automation refers to the application of artificial intelligence and related new technologies, including computer vision; cognitive automation and machine learning to robotic process automation.
The findings of the PwC report include:
· All regions of the global economy will experience benefits from AI.
· North America will experience productivity gains faster than China initially, driven by its readiness for AI and the high fraction of jobs that are susceptible to replacement by more-productive technologies.
· China will begin to pull ahead of the US’s AI productivity gains in ten years, after it catches up on a slower build up to the technology and expertise needed.
· Europe and Developed Asia will also experience significant economic gains from AI (9-12% of GDP in 2030)
· Developing countries will experience more modest increases (less than 6% of GDP) due the much lower rates of adoption of AI technologies expected (including Latin America, and Africa).
Included in the analysis, the PwC AI Impact Index pinpoints three business areas with the greatest AI potential in each of eight sectors. Areas identified include image-based diagnostics, on demand production and autonomous traffic control.
Overall, the biggest absolute sector gains will be in retail, financial services, and healthcare as AI increases productivity, product value and consumption. By 2030, an additional $9trn of GDP will be added from product enhancements and shifts in consumer demand, behaviour, as AI driven consumption gains overtake those of productivity.
Hofert adds: “AI is set to be the key source of transformation, disruption and competitive advantage in today’s fast changing economy. No industry or business is immune from the impact of AI. Business that fail to take AI into consideration could find themselves being undercut on turnaround times as well as significant costs and experience – subsequently, they may lost a substantial amount of their market share.”
The analysis underlines how the scale of the opportunity of AI needs to be underpinned by both more robust governance and new operating models to realise its full potential. A recent paper from PwC UK on Responsible AI warned effective controls need to be built into the design and implementation phase to ensure AI’s positive potential is secured, and address stakeholder concerns about it operating beyond the boundaries of reasonable control.
The demand for data scientists, robotics engineers and other tech specialists in increasing. These skills are in short supply, in particular in less developed markets. It will be vital to gear long-term training and development to these emerging needs. As the adoption of AI gathers pace, the value of skills that can’t be replicated by machines is also increasing. These include creativity, leadership and emotional intelligence.
Businesses will need to prepare for a hybrid workforce in which AI and human beings work side-by-side. People will need to be responsible for determining the strategic application of AI and providing challenge and oversight to decisions.
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