Harnessing AI-Driven Growth
In previous issues, we’ve looked at how artificial intelligence (AI) will transform such industries as:
- Transportation (with driverless cars and trucks)
- The military (with robotic soldiers and sentries)
- Healthcare (with tools like wireless health monitoring and IBM’s Watson for Oncology, which helps doctors improve the accuracy of their diagnoses)
- Advertising (with algorithms that determine which ad to show to a shopper based on her past purchases, preferences, and demographics)
- Financial services (with knowledge engines and digital assistants that answer customers’ questions in plain English)
- Manufacturing (with factory robots that work side by side with human workers)
- Law enforcement (with facial recognition software that identifies criminals from surveillance footage)
Now, it’s time to examine the big picture by putting all the pieces together to see how artificial intelligence will affect the economy. According to The McKinsey Global Institute, AI’s transformation of the economy is “happening ten times faster and at 300 times the scale—or roughly 3,000 times the impact” of the Industrial Revolution.1 As AI transforms one industry after another over the coming decade, it will spur economic growth throughout the world, but particularly in the United States.
This couldn’t happen at a better time. According to calculations based on World Bank data, in the six full years since the Great Recession ended in mid-2009, U.S. GDP has grown by a woeful average of only 2.1 percent per year.2
Now, as AI enables businesses and individuals to increase their productivity, the U.S. will finally have the means to achieve average GDP growth of 3.5 percent or greater that we’ve been predicting, starting as soon as 2017 and lasting for at least the next twenty years.
Even that prediction may be too conservative, according to a new study released by the Accenture Institute for High Performance, in collaboration with Frontier Economics, titled “Why Artificial Intelligence is the Future of Growth.”3
The study looked at the potential impact of AI on economic growth, focusing on the twelve countries that account for more than half of the world’s economic output. It found that AI technologies will increase labor productivity by as much as 40 percent by changing how work is performed and creating a new collaboration between people and machines in the workplace...
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