A simulation from McKinsey Global Institute claims that there can be a growth of 1.2 per cent to annual gross domestic product at least for the next decade or so because of the contribution from artificial intelligence (AI).
The report compared the economic impact of the technology, which is pegged to contribute about $13 trillion more to the global economic activity by 2030, to other technological developments such as the discovery and creation of the steam engine.
About 70 per4 cent of all the companies in the world would adopt one or more forms of Ai by the year 2030, predicts the institute's model in the report which was published on Tuesday. The report also predicts that the entire range of technology offered by Ai would be adopted by larger global firms.
Human behavior is mimicked by AI using large data sets and algorithms. Significant investment in the technology is being done in two of the largest economies of the world – the United States and China. The McKinsey report especially pointed out the case of China which has incorporate development and furthering of AI technologies in its five-year plan that runs through 2020 and desires to transform itself as the global in the technology by 2030.
"Without AI, China might face a challenge to achieve its target growth rate," Jeongmin Seong, one of the report's authors and a senior fellow at McKinsey Global Institute in Shanghai, said in an interview with a television channel.
The Chinese economy is in a transition period from an exporting one to a consuming one and the labor productivity ion China is lower than the global average, he noted. There would be a significant impact of Ai based technologies in sales and marketing that could increase consumer spending, Seong believes. He added that there would be significant returns in the supply chain and manufacturing businesses with the help of AI technologies.
According to the McKinsey report, multiple channels would be used for extracting the benefits and impacts of AI on the economy. such channels or modes would include aiding or augmenting and even substituting human labor, expansion of the range of products and services currently available, enhancing data flows globally and creating wealth.
However, there would also be a range of corporate and societal restructuring costs in implementing the technology, the report also noted. The report also noted that the AI technology would also disrupt employment and potentially reduce consumption.
"The productivity enhancing, labor-saving technology is a challenging issue for all of the economies in the world," Takashi Miwa, chief Japan economist at Nomura, said at a press briefing on Tuesday. Technologies such as AI will likely lead to greater income inequality, he said.
About 20 to 25 per cent more in economic benefits could be captured, against the current levels, by the countries that have already taken the lead in the AI technology which are mainly developed economies, McKinsey analysis also found. It also mentioned that only about half of the gains would be realized by emerging economies.
"This inequality is not given," Seong said. "The future is up to us to shape."
(Source:www.cnbc.com)
The report compared the economic impact of the technology, which is pegged to contribute about $13 trillion more to the global economic activity by 2030, to other technological developments such as the discovery and creation of the steam engine.
About 70 per4 cent of all the companies in the world would adopt one or more forms of Ai by the year 2030, predicts the institute's model in the report which was published on Tuesday. The report also predicts that the entire range of technology offered by Ai would be adopted by larger global firms.
Human behavior is mimicked by AI using large data sets and algorithms. Significant investment in the technology is being done in two of the largest economies of the world – the United States and China. The McKinsey report especially pointed out the case of China which has incorporate development and furthering of AI technologies in its five-year plan that runs through 2020 and desires to transform itself as the global in the technology by 2030.
"Without AI, China might face a challenge to achieve its target growth rate," Jeongmin Seong, one of the report's authors and a senior fellow at McKinsey Global Institute in Shanghai, said in an interview with a television channel.
The Chinese economy is in a transition period from an exporting one to a consuming one and the labor productivity ion China is lower than the global average, he noted. There would be a significant impact of Ai based technologies in sales and marketing that could increase consumer spending, Seong believes. He added that there would be significant returns in the supply chain and manufacturing businesses with the help of AI technologies.
According to the McKinsey report, multiple channels would be used for extracting the benefits and impacts of AI on the economy. such channels or modes would include aiding or augmenting and even substituting human labor, expansion of the range of products and services currently available, enhancing data flows globally and creating wealth.
However, there would also be a range of corporate and societal restructuring costs in implementing the technology, the report also noted. The report also noted that the AI technology would also disrupt employment and potentially reduce consumption.
"The productivity enhancing, labor-saving technology is a challenging issue for all of the economies in the world," Takashi Miwa, chief Japan economist at Nomura, said at a press briefing on Tuesday. Technologies such as AI will likely lead to greater income inequality, he said.
About 20 to 25 per cent more in economic benefits could be captured, against the current levels, by the countries that have already taken the lead in the AI technology which are mainly developed economies, McKinsey analysis also found. It also mentioned that only about half of the gains would be realized by emerging economies.
"This inequality is not given," Seong said. "The future is up to us to shape."
(Source:www.cnbc.com)