By Arav Talati. Edited by Arjun Chandrasekar.
Ten years ago, if you mentioned the term “artificial intelligence,” there’s a good chance that people would have laughed at you. For most people, it would bring to mind sentient or sci-fi machines. In actuality, Artificial Intelligence is “the simulation of human intelligence processes by machines.” Back then, nobody would’ve guessed that this incredible, world-advancing, world-dominating technology would have taken the world by storm. The craziest part is that we’re only at the tip of the iceberg, and as time goes on, it’s clear that AI will rapidly grow. This technology is of vital importance for industries, and the economic impact it will have on a global scale will be massive.
Many companies are beginning to utilize AI in their services, and it’s beginning to have a massive effect on both consumer satisfaction and companies’ revenue. Alibaba, Amazon, and JD.com use AI as a part of their e-commerce platforms. It is integral in Alibaba’s and Amazon’s daily operations as it predicts what customers might want to buy. The AI collects data about each person’s buying habits, and then using predictive analytics, it recommends items to its customers. JD.com is already on the road to being 100% automated according to its founder. Its warehouse is already automated, and the company has been doing drone deliveries for four years to date. Even Alphabet has broken into the AI game, with its self-driving car division Waymo driving Californians in self-driving taxis. AI is powering change in every industry across the globe. Companies are becoming increasingly data-driven, and with that, we can see that the demand for AI technology will only continue to grow. AI technology provides enterprises the computing power, tools, and algorithms their teams need to do their life’s work.
With all these companies (and many others) using AI to improve their company’s services and products, what has been the impact on an economic level? Will AI have an even higher contribution to the economy in the future? According to McKinsey (Management Consulting), AI may deliver an additional economic output of around US$13 trillion by 2030, increasing global GDP by about 1.2 % annually. This will mainly come from the substitution of labor by automation and increased innovation in products and services. AI will also contribute to the macroeconomic impacts of AI and the related trade effects. Having AI doing specific tasks can increase productivity growth, and this will increase economic growth for industries. AI can free up the human workforce to do work we are better equipped for like tasks that involve creativity and empathy among others, rather than repetitive or highly dangerous work. With every world-changing innovation comes a change in the economy, and AI will do just that.
This technology has caught the attention of everyone in the world as it has the potential to increase customer satisfaction, productivity, improve products and services, and even more. We’re not too far from AI world domination, so you better watch out!