A recent simulation from the McKinsey Global Institute revealed that artificial intelligence (AI) could add an extra 1.2% yearly gross domestic product growth for at least ten years.
However, considerable gaps existing between workers, regions, and organizations would need to be appropriately managed in a bid to get optimal benefits.
In total, artificial intelligence (AI) could generate $13 trillion in extra global economic activity by 2020. According to McKinsey, the estimation puts the technology’s contributions to economic growth on the same level with the introduction of other transformative technologies like the steam engine.
What ’s more, the McKinsey Global Institute’s model anticipates that nearly 70% of companies would adopt at least a single form of artificial intelligence by 2020 and that a considerable portion of big firms would leverage the technology’s full range. Whether through acquiring artificial intelligence companies or their in house initiatives.
Insight UK’s Market Manager Alex Guillen, asserted: “artificial intelligence paves the way towards creating a next-generation workforce, where bots deal with time-consuming repetitive tasks offer organizations the change to redeploy workers to more engaging and value-creating tasks.
But as business leaders increase adoption of complex AI, they’re going to look at how to configure the organization to manage, monitor and support the bots-just like you would people. To be successful, organizations need to have a culture fitting of automation in the same way they need a culture to fit a diverse workforce.”
AI utilizes algorithms and massive data sets to imitate human behavior. Both China and the US are currently involved in a fierce competition to invest considerably in the technology. The McKinsey report went ahead to point out Beijing for making AI a key part of its five-year-plan, which runs through 2020. China also intends to become a global leader in the revolutionary technology.
Jeongmin Seong a senior fellow at Shanghai-based McKinsey Global Institute and one of the authors behind the institute’s report said that without AI, China may have challenges achieving its targeted growth rate.
He also noted that the labor productivity in China is below the international average, while the economy is shifting to one that is dependent on consumption. Seong added that he anticipates AI to have a considerable impact in both marketing and sales, which could aid in improving consumer spending.
The McKinsey report also pinpointed out how artificial intelligence would probably impact the economy through various channels including increasing global data flows and creating wealth, expanding available products and services, and augmenting human labor.
Nonetheless, the report noted that the technology’s implementation would likely incur a wide range of societal and corporate restructuring costs as well as reducing consumption and disrupting employment.
“The productivity enhancing, labor-saving technology is a challenging issue for all of the economies in the world,” said Nomura’s chief Japan economist Takashi Miwa. He added that technologies like artificial intelligence (AI) would probably result in more income inequality.
The McKinsey evaluation found out that nations that position themselves as artificial intelligence(AI) leaders, could get 20-25% more in terms of economic benefits in comparison to current levels. The report said that the emerging economies, on the other hand, might only gain half of such benefits.