Global gross domestic product (GDP) will be 14% higher in 2030 as a result of artificial intelligence (AI) – the equivalent of an additional $15.7 trillion, or more than the current output of China and India combined – according to research by PricewaterhouseCoopers.
This makes it the biggest commercial opportunity in today’s fast changing economy, suggests the professional services giant. PwC’s study, entitled ‘Sizing the prize’ outlines the economies that are set to benefit most from AI.
Labour productivity improvements are expected to account for over half of all economic gains from AI over the period 2016-2030. Increased consumer demand resulting from AI-enabled product enhancements will account for the rest.
The greatest economic gains from AI will be in China (26% boost to GDP in 2030) and North America (14.5% boost), equivalent to a total of US$10.7 trillion and accounting for almost 70% of the global economic impact.
- North America will experience productivity gains faster than China initially, driven by its readiness for AI and the high fraction of jobs that are susceptible to replacement by more-productive technologies.
- China will begin to pull ahead of the US’s AI productivity gains in 10 years, after it catches up on a slower build up to the technology and expertise needed.
- Europe and Developed Asia will also experience significant economic gains from AI (9-12% of GDP in 2030).
- Developing countries will experience more modest increases of less than 6% of GDP, due to the much lower rates of adoption of AI technologies expected (including Latin America, Africa).
“The analysis highlights how the value of AI enhancing and augmenting what enterprises can do is large, if not larger than automation,” said Anand Rao, PwC’s global leader of AI. “It demonstrates how big a game changer AI is likely to be – transforming our lives as individuals, enterprises and as a society.”
Within the analysis, the PwC AI Impact Index pinpoints three business areas with the greatest AI potential in each of eight sectors: healthcare, automotive, financial services, retail, technology, manufacturing, energy and transport/logistics. Areas identified include image-based diagnostics, on demand production and autonomous traffic control.
Overall, the biggest absolute sector gains will be in retail, financial services, and healthcare as AI increases productivity, product value and consumption. By 2030, an additional US$9 trillion of GDP will be added from product enhancements and shifts in consumer demand, behaviour, as AI driven consumption gains overtake those of productivity.
“No sector or business is in any way immune from the impact of AI,” said Gerard Verweij, global data and analytics leader at PwC. “The impact on productivity alone could be competitively transformational and even disruptive. Businesses that fail to apply AI, could quickly find themselves being undercut on turnaround times as well as costs and experience, and may lose a significant amount of their market share as a result.
“The big challenge is how to secure the right talent, technology and access to data to make the most of this opportunity.”
The analysis underlines how the scale of the opportunity of AI needs to be underpinned by both more robust governance and new operating models to realise its full potential.
An earlier PwC UK paper on responsible AI warned that effective controls need to be built into the design and implementation phase to ensure AI’s positive potential is secured, and address stakeholder concerns about it operating beyond the boundaries of reasonable control.