AI: Economic Boom But Jobs Bust?
Source: Jessica Davis
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Artificial Intelligence could double annual economic growth rates by 2035, according to a recently released report from Accenture that modeled the impact of AI on 12 developed economies, including the US. But this AI-enabled world also comes with drawbacks.
Enterprises around the world are increasingly investing in technologies for data innovation, including machine learning and even artificial intelligence (AI) as they look to close the gap with digital native companies such as Uber and Waze. But will these technologies really make a significant impact beyond these newer companies?
New research from consulting firm Accenture says it will. A report from the company shows that these technologies are poised to exert an enormous impact on economic growth rates and workforce productivity. As IT organizations help their enterprises implement such technologies, they will also help those enterprises compete in this new era.
Accenture said that AI technology could double economic growth rates by 2035 by changing the nature of work. AI's impact on business is projected to boost labor productivity by up to 40% by changing the way work is done.
"AI is poised to transform business in ways we've not seen since the impact of computer technology in the late 20th century," said Paul Daugherty, Accenture CTO, in a prepared statement.
"The combinatorial effect of AI, cloud, sophisticated analytics, and other technologies is already starting to change how work is done by humans and computers, and how organizations interact with consumers in startling ways. Our research demonstrates that as AI matures, it can propel economic growth and potentially serve as a powerful remedy for stagnant productivity and labor shortages of recent decades."
The increased productivity comes by enabling people to make more efficient use of their time to create, imagine, and innovate, according to the Accenture report.
Forrester Research recently weighed in on the impact of AI on the US workforce, and said that jobs held by humans are likely to be replaced by machines. The firm said cognitive technologies like artificial intelligence, machine learning, and robotic automation will eliminate 16% of US jobs by 2025, but they will also create new jobs amounting to a 9% increase over the same period, for a net job loss of 7%.
The Accenture Institute for High Performance collaborated with Frontier Economics to model the impact of AI for 12 developed economies that together generate more than half the world's economic output.
Specifically, the model looks at the year 2035 and what the economic growth would look like for those 12 economies in a baseline scenario without the impact of AI, and then with the impact of AI. This simulation reveals that the US would enjoy the highest economic benefits from AI, increasing its annual growth rate from 2.6% to 4.6% by 2035, an increase that translates to another $8.3 trillion in gross value added, according to Accenture.
But with these new technologies come new caveats, among them the expected job and worker income losses, and Accenture also offered four recommendations to help organizations and economies navigate the complexity that comes with an AI-enabled society:
Prepare the next generation for the AI future. Integrate human intelligence with machine intelligence so the two can successfully coexist, and reinforce the role of people to drive growth.
Encourage AI-powered regulation. Update and create adaptive, self-improving laws to close the gap between the pace of technological change and the pace of regulatory response.
Advocate a code of ethics for AI. Ethical debates should be supplemented by tangible standards and best practices in the development and use of intelligent machines.
Address the redistribution effects. Policy makers should highlight how AI can result in tangible benefits and preemptively address any perceived downsides of AI.