How big impact will AI have on our economy?

Or is AI a new type of production factor in the economy?

According to Accenture research we should start to see AI as a new production factor and they have 3 main arguments:

  • AI is neither labor or capital but rather a hybrid between both and as automation is self improving it should not be written off as ordinary automation equipment

  • AI complement and increases the skills and ability of existing workforce and capital rather than being in competition with them

  • AI drives innovation mainly by creating new business models based on new use of existing data

By applying the new model on a dozen developed countries and comparing a non AI baseline with a AI a few countries come out as AI mature/ready/forefront (US, Finland, Sweden, UK, Netherlands) where AI stands for significant part of the growth already today and could achieve double digit growth of maximizing AI opportunity

I share the authors view that today’s way of measuring growth has flaws and that we need to find better ways to capture several disruptive technologies do that in the future.

I think there are some benefits with the proposed model thinking about AI as something that will significantly change society over time.

Until we achieve the singularity of AI being able to build new AI I think AI will need to operate together with other technological devices (self driving cars for example) and humans. This means the old combination of human and capital works as a decent approximation even if not perfect.

I would also challenge that AI would not have to be written off over time. An AI that is not maintained, enhanced, given more computing power will decay over time as it would be replaced by better AIs. The AI also drives operational cost even if run in the cloud so there would always be a trade off between that and solving the task by other means.

With current technology maturity I think AI short term is more about replacing white collars as automation did with blue collar in the past. Many task will be automated or significantly transformed while new (train the AI for example) will be created for the white collars.

More interesting is where AI more mid term can enable a smarter society and new business models we will start to change society for real. My belief is that AI likely is a key enabler in that change but will not be sufficient in itself. It is only when you combine the AI with sensor data, robots, better integration with humans, 3D printing and a long list of other technologies and trends that will give us the big changes.

How to measure that change is still out for grabs and the proposed model by Accenture research is probably not the answer even if a good attempt.

Future of Artificial Intelligence Economic Growth | Accenture

Read our research on how artificial intelligence is poised to double economic growth in 2035, and the impact AI will have on business.

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