Nearly every entrepreneur, business owner, government policy planner or even an economist has, at some time, toyed with the idea of reaching maximum efficiency. This is a state of economic activity where everything (all factors of production) is deployed with maximum effectiveness and is generating maximum operating efficiency. However, this utopian state of economy activity, no matter how tantalizing it maybe, has a downside to it as well i.e. you cannot grow further beyond this stage and from here on, your growth rate will always be equal to 0.
The world’s economy is dependent on how well the economies of the nations that contribute the most to it, performs. Among them, some of the major nations are the United States, Germany, France, Japan, United Kingdom, Spain & Belgium. However, these nations are not expected to grow substantially in the next two decades, mainly because, these developed economies have reached a point where they have exhausted their maximum operating capacity and are now almost close to their efficient production levels. There is very little room to expand beyond that.
The future growth scenario looks bleak for these countries, but the infusion of a single, radical, yet highly disruptive, factor of production, within the existing economic system of these economies, has the potential to change all of this and power the next segment of growth forward.
According to a new research by Accenture, Artificial Intelligence or AI could end up being this agent of change and help provide impetus to reignite growth in world’s major economies by helping to grow business productivity. The research was conducted on 12 major world economies that contribute more than 50% to the world’s total economic output, and it revealed that the deployment of AI could, at least, help double the growth rates in these economies by 2035.
Countries like the United States could see their growth rate revised from just 2.6% to 4.6% in 2035 if it succeeds in reaping the benefits of AI in its business sector. This could mean that a whopping $8.3 trillion could be added to its Gross Value Added (GVA). Even nations like Sweden, Germany, and Netherlands will almost double their growth rates in the same period with the help of AI, according to the report.
AI will also help in solving the problems of labor productivity by boosting it up by a staggering 40%. Recent advancements in remote data management & storage (cloud computing) and the vast amounts of data being generated by the help of billions of connected devices across the globe, has helped AI to make a tremendous global economic transformation possible in the times to come.
Currently, AI led advancements have been largely visible in the fields of healthcare, business intelligence, autonomous vehicles and more. From legal firms to the financial sector, every single industry is trying to inculcate this immensely helpful tool into their existing systems and the results have been highly impressive up till now.
AI is built upon neural networks that mimic the functioning structure of the human brain, making it capable of performing tasks, which were previously considered, strictly in the human domain. It can help free up humans from mundane and repetitive tasks that require a certain degree of intelligence like sifting through hundreds of legal documents and evidence and reaching to judgment or even helping in diagnosing bone fractures and tumors from hundreds of medical examination reports within a much shorter time. The free time, then, could be applied by humans to do much more complex tasks that will help solve even more complex problems.
The extent to which AI could end up changing the economies of a lot of countries can be gauged by that fact that just by automating cars, the world economy could end up realizing $5.6 trillion in annual savings.
But, there are a few impediments to the introduction of AI in our economies as well and one of them, and probably the most important one, is the mass displacement of workers and elimination of thousands of jobs due to the redundancy of skill that introducing AI will bring in. There has been a lot of talk over the anxiety related to the elimination of jobs due to AI tools, but data suggests that this will happen gradually and AI will have to cross certain stages to become better than humans at certain tasks, which will happen over a longer period of time. Till then, we need to focus on how we can shift those workers into new areas of the economy and bring in a new set of education development program that helps prepare children for the jobs of tomorrow. But, having said that AI is still the most powerful and impressive economic opportunity to have presented itself up till now in the history of mankind and it will definitely lead us into the fourth economic revolution and probably this will be our last and most impressive feat as the most intelligent creatures on this planet Earth.
Carla Adams is an enthusiastic dreamer and a super workaholic to achieve all of that. She is a blogger, writer, basketball player, technology, and fashion freak. Currently, she is associated with Alfa Romeo Central Florida, dealers of premium new and used cars in greater Orlando area, for their blog operations. For all the updates follow her on Facebook, Twitter.