The Promise and Pitfalls of AI
The AI revolution will bring short-term pain before long-term gains. If that pain occurs against a backdrop of frustration with the unequal distribution of AI's benefits, it may trigger a backlash against technologies that could otherwise produce a virtuous cycle of higher productivity, income growth, and employment-boosting demand.
BRUSSELS – Like any transformative trend, the rise of artificial intelligence (AI) poses both major opportunities and significant challenges. But the gravest risks may not be the ones most often discussed.
According to new research from the McKinsey Global Institute (MGI), AI has the potential to boost overall economic productivity significantly. Even accounting for transition costs and competition effects, it could add some $13 trillion to total output by 2030 and boost global GDP by about 1.2% per year. This is comparable to – or even larger than – the economic impact of past general-purpose technologies, such as steam power during the 1800s, industrial manufacturing in the 1900s, and information technology during the 2000s.
Perhaps the most discussed concern about AI is the prospect that intelligent machines will replace more jobs than they create. But MGI’s research found that the adoption of AI may not have a significant effect on net employment in the long term. Extra investment in the sector could contribute 5% to employment by 2030, and the additional wealth created could drive up labor demand, boosting employment by another 12%.