Artificial Intelligence to Double Economic Growth Rates
Between 2011 and 2015, U.S. labor productivity only grew 0.4 percent on average per year — far below the 2.3 percent growth rate that’s been the average since the 1950s, according to The New York Times. Although economists aren’t sure what’s behind the slowdown, a new report suggests artificial intelligence (AI) could be the remedy.
In its new report “How AI Boosts Industry Profits and Innovation,” Accenture predicts that by augmenting human productivity, AI could double economic growth rates in the world’s top 12 developed countries by 2035 and contributing $14 trillion to the world economy. The study also predicts AI will boost corporate profitability by 38 percent, with the biggest gains in the information and communication, manufacturing and financial services industries.
Understanding Labor Productivity
As the U.S. Bureau of Labor Statistics explains, economists measure labor productivity by dividing the total output of goods and services by the number of labor hours needed to create that output. Increasing labor productivity correlates strongly with higher economic prosperity, because each hour of labor produced by a worker generates more value for the economy.
Some analysts attribute the decline in productivity growth to the implementation of major technology and efficiency innovations in most workplaces. As The New York Times points out, every worker’s desk now has a personal computer, and businesses have already realized the efficiency gains produced by a wave of outsourcing in the 1990s and early 2000s. By supplementing the work humans do and multiplying human effort exponentially, AI could be the next technological wave to supercharge labor productivity and profits.
The AI Opportunity
When most people envision AI in the workplace, they think of machines that take over menial tasks so humans no longer have to perform them. This kind of automation has already significantly streamlined manufacturing operations. Now, analysts expect added disruption in other industries as the technology gives birth to new lines of business, such as autonomous vehicles. Automation can also significantly impact the services sector by replacing human jobs like cashiering with ordering and point-of-service kiosks.
It’s hard to deny that the coming AI revolution will bring a powerful transition to developed economies. However, AI also offers a powerful impetus for job creation and provides compelling assistance to humans in existing jobs. Imagine collaborative robots powered by industrial Internet of Things devices that provide real-time assistance to human workers on the factory floor. Envision high-speed public transportation options with traffic patterns optimized by machine learning that expand the geographic footprint where workers can find jobs.
Accenture bases its predictions on a vision of AI augmenting, not replacing, human labor. The report states that the company believes AI will succeed in doubling annual growth rates by 2035 “by changing the nature of work and creating a new relationship between people and machines, in which people are firmly in control and technology increasingly adapts to our wants and needs.”
AI, implemented with those principles in mind, could unleash labor productivity like no other industry before it. With a little vision — and a healthy dose of human ingenuity — societies can determine how to turn those increased economic outputs into greater prosperity for all.