Economic growth to gain from AI

ARTIFICIAL intelligence (AI) can bring additional economic output of around US$13 trillion by 2030, boosting global GDP by about 1.2 per cent a year, according to a recent McKinsey report. This net growth comes after taking in the costs of automation on the labour force, even as the consultancy flagged that workers must be ready for jobs to be transformed by technology. The potential behind AI comes as an estimated 70 per cent of global companies is due to adopt at least one form of such technology by 2030, said the McKinsey Global Institute report that was released in September. As a rough guide, this compares against the introduction of steam engines during the 1800s that lifted labour productivity by an estimated 0.3 per cent a year; the productivity gains from the use of robots during the 1990s at about 0.4 per cent, and the impact from the use of IT during the 2000s that raised productivity by an annual 0.6 per cent. The economic impact from using AI may emerge gradually and be visible only over time, with McKinsey expecting a S-curve adoption of AI - a pattern that suggests a slow start given the investment associated with learning and deploying the technology, and then an acceleration driven in part by competition.