Is Artificial Intelligence the Future of Economic Growth?

June 23, 2022

Artificial intelligence, or AI, is a remarkable technology with practical and theoretical applications in nearly every industry. In transportation, it powers intelligent map routing and self-driving cars. In healthcare, it helps identify cancers in radiological scans. In banking, it detects fraud better than human auditors. Artificial intelligence careers are largely industry-neutral

Humanity has only just begun to explore the potential of AI and machine learning algorithms, but from what we’ve seen so far, there’s no end to what AI can do given good data sets and time. There’s every reason to believe that potential will eventually translate into massive economic growth as organizations find new ways to use cutting-edge technologies such as deep learning, natural language processing and neural networks to meet goals. 

PriceWaterhouseCoopers predicts that “AI, robotics and other forms of smart automation have the potential to bring great economic benefits, contributing up to $15 trillion to global GDP by 2030.” Some sources warn this rapid growth may come at a cost. PriceWaterhouseCoopers’ report on automation’s impact on jobs suggests that artificial intelligence could displace as many jobs as it creates. 

We know there’s no stopping the rise of artificial intelligence, but no one can predict whether AI will be a rising tide that lifts all boats. Economic upturns don’t necessarily benefit people equally. Given the inevitability of an AI-enabled future, however, it’s a good idea to start reskilling now in a program like the SMU Lyle School of Engineering’s Online Master of Science in Computer Science with Artificial Intelligence Specialization (MSCS-AI). To understand the benefits of reskilling to launch an AI career, you need to understand why AI will have such a powerful effect on the global economy and the kinds of challenges human workers may face in an AI-enabled world.

Why Artificial Intelligence Is a Significant Driver of Economic Growth

Accenture predicts AI could double annual global economic growth rates by 2035 through “intelligent automation, labor and capital augmentation and innovation diffusion.” AI’s impact is so significant because artificial intelligence tools and systems could boost productivity and profits by as much as 40 percent – assuming there are enough qualified professionals to step into newly created artificial intelligence job postings.

Ninety-one percent of enterprises expect AI to deliver new business growth by 2023. AI-driven automation is already helping companies, governments and nonprofits cut costs. AI and machine learning systems are helping organizations create and deliver better quality products. Artificial intelligence systems will also take over most tedious, repetitive jobs, freeing many workers to concentrate on higher-value tasks. The use of AI will spread year over year, and the field of artificial intelligence will branch, affecting job markets in myriad ways. 

As organizations discover new virtual labor sources, revenue streams and ways to automate the personalization of goods and services, professionals with artificial intelligence skills will step into new, potentially higher-paying AI jobs. Emerging roles in artificial intelligence include AI architect, AI engineer, AI programmer, AI researcher, AI product manager, AI technology software engineer and AI ethicist. 

How Does the Impact of AI Compare with that of Other Technological Disruptions?

Many sources refer to the rise of artificial intelligence as the “fourth industrial revolution.” The first three industrial revolutions – marked by the invention of the steam engine, the emergence of new energy sources and mass production in the electronics age – transformed the way people lived and worked. They even reshaped politics and policy.

According to a 2018 report by the McKinsey Global Institute, AI could boost the total global economic output to around $13 trillion by 2030 and increase productivity by 1.2 percent annually in the same period. That would make artificial intelligence the most disruptive technology the world has ever seen. The report found that the “introduction of steam engines during the 1800s boosted labor productivity by an estimated 0.3 percent a year, the impact from robots during the 1990s around 0.4 percent, and the spread of IT during the 2000s 0.6 percent.”

AI may be so disruptive because adoption is so widespread. The Oxford Insights Government AI Readiness Index predicts that even if some parts of the world are slower to invest in artificial intelligence, the eventual impact on those nations’ economies will be just as significant if they begin capitalizing on AI’s potential and developing AI professionals now. There are, for example, no Latin American or African countries among the nations rated as most ready to exploit the benefits of AI. However, countries in those regions are still developing national AI policies, strategies and regulations; investing in artificial intelligence education and research; and exploring public-private technology partnerships.

Policymakers Struggle to Understand Artificial Intelligence

Governments face challenges in keeping up with technological changes because many policymakers don’t have the education or experience necessary to keep up with the pace of innovation. However, it is vital that leaders understand the role emerging technologies such as artificial intelligence will play in sustained economic growth, national security and maintaining citizens’ well-being. 

AI may be a tricky technology for legislators to regulate because of its past associations with science fiction. Misconceptions about what AI is, how it will affect employment and the future of artificial intelligence abound. Yet however challenging artificial intelligence is to understand, policymakers across the globe must be active participants in pushing AI investments forward in their nations to ensure those nations don’t miss out on future economic growth driven by artificial intelligence-enabled technologies. 

In 2016, the White House Office of Science and Technology Policy (OSTP) announced an AI-focused workshop series and invited public comments on “how best to harness the opportunities brought by artificial intelligence.” Former Deputy U.S. Chief Technology Officer Ed Felten saw “tremendous opportunities and an array of considerations across the Federal Government in privacy, security, regulation, law and research and development to be taken into account when effectively integrating this technology into both government and private-sector activities.”

Policymakers’ response to the proliferation of AI in various sectors will determine what opportunities there are for governments to promote growth, experimentation and public-private partnerships while also protecting workers from job displacement. “Carefully designed policy would be able to foster the development of AI while keeping the negative effects in check,” according to a European Parliament report on the economic effects of AI. Whether policymakers can agree on a growth-promoting artificial intelligence strategy remains to be seen.

Is Humanity Ready for AI to Disrupt the World Economy?

Artificial intelligence could change the world for the better, but the benefits of AI may not manifest equally. One of the most significant risks associated with any new technology is that implementation will lead to greater economic inequality. In the case of AI, fears that many people will see little or no benefits aren’t unfounded. Automation has been a primary driver of income inequality in the United States since 1980, according to a National Bureau of Economic Research report. A World Economic Forum report predicts that a “new generation of smart machines, fueled by rapid advances in AI and robotics, could potentially replace a large proportion of existing human jobs.”

There’s no denying that AI will have a massive impact on the global economy for better or worse – or both. Artificial intelligence may be a boon for some people and not others. AI-driven automation could make it less expensive to bring manufacturing back to the U.S., potentially increasing the number of jobs for Americans but taking a valuable source of economic stability away from poorer nations. Professionals with advanced degrees plus programming skills and related problem-solving skills may be less vulnerable to the impact of automation – and even thrive in an information technology landscape powered by automation – while less-educated workers could face stagnating wages or redundancy. 

Ultimately, the demand for computer science and data science professionals with AI skills is growing across industries and career paths are changing as a result. You can prepare to excel in an AI-enabled future and guide artificial intelligence in a positive direction by pursuing a master’s degree such as SMU Lyle’s online MSCS-AI. Reskilling is the key to staying relevant, according to Bloomberg, which reported that “more than 120 million workers globally will need retraining in the next three years due to artificial intelligence’s impact on jobs.” The training you receive in SMU Lyle’s artificial intelligence program will prepare you to take full advantage of career opportunities caused by AI-driven economic disruption.