Report: AI will add $13T to global economy by 2030
Source: SmartCitiesDive on September 11, 2018
A new report from McKinsey and Company predicts that artificial intelligence (AI) will boost the global economy by $13 trillion by 2030, adding roughly 1.2% to global GDP a year. Impact will likely build at an accelerating pace, the report states, as adoption grows more widespread.
Automation of labor will be the biggest economic impact, adding about $9 trillion to GDP. Although the authors note that AI could replace some jobs, they predict that new jobs driven by AI investment could boost employment by 5%, although that would require some workers to train for new positions and adjust for a changing workforce.
The positive impacts of AI will not affect all governments equally: developed countries that are already preparing for artificial intelligence could see an economic boost of 20% to 25%, while developing countries will top out at 15% and may have less incentive to push for new technology.
AI has great potential to improve smart cities. Machine learning will underpin everything from traffic management to pollution reduction, and will help cities better manage vast swaths of data that support smart cities investment. The McKinsey report finds that about $6 trillion of AI’s impact by 2030 will come through new products and services, in fields ranging from health care to investment.
One of the biggest impacts will come in transportation, with companies like Ford looking to AI to help boost autonomous vehicle (AV) technology. The car company made a splash in February with a $1 billion investment over five years in Argo AI, while AI is expected to help with navigation, like with Facebook testing an AI-backed navigation system in New York City.
Still, the authors warn that countries need to adapt now to the coming technology, and in different ways (wealthier regions could be better adapted for the labor displacement, for example). It’s a warning for cities as well: not every city will incorporate AI in the same way, but the impacts will be felt around the world. McKinsey emphasizes the benefits for early adopters, and notes that China has outpaced the rest of the world with a deliberate strategy of becoming a supply chain leader in AI.
It’s similar to the ongoing debate about the potential labor impact of autonomous vehicles on the trucking and taxi industry. Legislators have tried to mitigate the potential labor impacts from AV regulations (although that legislation remains stalled in the Senate); a similar effort may be necessary for AI to ensure that workers don’t get left behind.