❓How will AI impact the global economy?

 




🌍 Experts on economy and technology think that AI will result in the growth of the global economy. In other words, it will boost the GDP of the world. For example, Accenture in its report ‘Why AI is the future engine of growth’ predicts that AI will double the global economic growth rate by 2035. PWC estimates that AI will add 15% to the world GDP by 2030. 📈

The contribution of AI to economic growth will come majorly from three factors:

💲 Capital investment in AI by the industry: most companies worldwide are spending on AI implementation because of its promise. Since capital expenditure is added to the GDP computation, this is one reason for the growth.

⏩ Productivity gain: AI enables automation of processes that are currently manual. This results in major productivity gains for the companies. Better productivity means better and cheaper products for the consumers. This boosts personal consumption which is a big part of the GDP calculation.

🆕 New products and services: AI will help to improve existing products and make them more personalized. It will also give rise to new products and services such as personal tutor, coach and assistant. These new products will propel consumption upwards and thereby improve the global GDP.

It is interesting that the first effect will happen early, in fact, it is already happening now. The productivity gain due to automation will come a little later. The impact of new products and services will come in the longer term, but it will be the biggest and long lasting of them all.

By Devesh Rajadhyax
Co-Founder, cere Labs

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