The progress in technology has been such that machines now today have the capability to either match or perform better than humans. It is true not only for tedious physical tasks but also tasks that require cognitive abilities. Artificial Intelligence or AI plays a vital role in this technological development. Further, the companies that incorporate AI in their business have the potential to give productivity a boost, which ultimately benefits the economy.
Robotics advancement, AI and machine learning are currently driving machines to do better for the business and economy. If used properly, it can give the national economies of different companies a productivity boost to improve their performance. AI is especially useful in automation. Even though automation is not new, the recent development and its progress are something new.
The driving force behind AI advancement
Machine learning has advanced in the past few years thanks to reinforcement learning and deep learning techniques. It is driving the acceleration of AI advancement. Furthermore, computing capacity has advanced, too, and along with it, the availability of the same has increased. The third crucial factor includes data generation. With the world going digital, plenty of data is generated daily, which is now used for creating machine learning models. Data such as IP addresses that one can check on What Is My IP and other personal and public data play a crucial role in machine learning. AI advancement is getting a boost through the combination of these three breakthroughs.
Benefits of AI adaptation in business
As discussed above, AI adaptation in business will significantly boost the productivity and performance of a business. So naturally, the companies that incorporate AI will have a competitive edge against others. The many benefits of including AI in business include but are not limited to improved prediction, optimization, accuracy and solutions. Furthermore, the role of AI is such that businesses can use it in any sector, including agriculture, healthcare, pharmaceutical and finance.
AI and economic opportunities
The positive impact of AI adaptation is not limited to businesses but tends to improve the general productivity of the entire economy. For instance, there is a labor supply shortage in many European countries because of the declining birth rate and the growing aging population. Using AI to sustain economic growth in such demography is vital. Even in the future, one can expect a big transition for workers in all sectors because of AI.
According to an Accenture report, AI can increase global economic growth twofold. AI will achieve the same in three ways. Firstly, it will improve the labor productivity of the existing employees by up to 40%. Secondly, it will create a virtual workforce which refers to automation. Lastly, AI will ensure the diffusion of different technology and innovation across all sectors, giving rise to new revenue streams.
Another study indicates that constant adaptation of AI can boost the global GDP by up to 14%. With the wide adoption of AI, one can expect a new wave of the digital revolution. It is believed that by 2030, 70% of global companies will use one aspect of AI at least. Even though it is considered that AI will kill employment opportunities, it is not the case. In fact, it is expected that AI will, directly and indirectly, have a positive impact on employment opportunities.
The impact of AI on the global economy
AI has five vital components: natural language, computer vision, robotic process automation, virtual assistants and advanced learning. Companies across the globe might use these components to varying degrees. Even though the adoption rate might differ between the companies, it is expected that at least one of these components will be used by 70% of companies by 2030. However, less than 50% of the companies will incorporate all five AI components.
Irrespective of the level of adoption and absorption, AI can add $13 trillion to global economic activity by 2030. However, whether these estimates stand true or not depends upon macro factors like labor market structure and micro components like the degree of AI adoption. The economic impact of AI can be broken down into production and externality channels. Even after considering all the different elements of these two channels, the net effect will be high.
Even though AI can boost economic growth, it is vital to ensure a smooth worker transition and skill enhancement amongst the laborers to avoid its negative impact.
