AI Adoption Will Be Critical for Growth in Coming Years, Says New Report
Developed economies across the globe have experienced subdued growth over the past three decades, but artificial intelligence has the power to reverse the trend.
“Increases in capital and labor are no longer driving the levels of economic growth the world has become accustomed to and desires,” begins a recent report compiled by The Accenture Institute for High Performance. “Fortunately, a new factor of production is on the horizon, and it promises to transform the basis of economic growth for countries across the world.”
This “new factor” is artificial intelligence, and the report argues that it has the potential to reverse a decades-long decline in GDP growth in developed economies. Since the 1980s, the average rate of GDP growth among France, Germany, Italy, Japan, the United Kingdom, and the United States has dropped by roughly 2%, and has been stuck around 1.1% for the better part of the new millennium.
Historically, capital investment and labor efficiency have been the two primary drivers of economic growth, but the report’s authors are concerned that these factors alone won’t be enough to drive prosperity in the near future. Analysts believe AI may be the next big innovation to radically change how economic growth is defined and measured.
The Unique Potential of AI to Drive Economic Growth
Instead of approaching AI as just another contributor to total factor productivity (TFP), which is how experts have measured the economic impact of innovation in the past, the report suggests that AI should be understood as a radically transformative force. Traditional models determine growth by taking the sum of capital, labor, and TFP, but Accenture’s adapted model proposes that growth will soon be comprised of four factors: capital, labor, TFP, and AI. In other words, unlike TFP, AI is — or at least could become — its own separate factor of production, not just a productivity enhancer.
The general promise of AI is threefold, according to the report. First, as the technology matures, it will offer companies an “intelligently automated” workforce that can augment (rather than replace) existing human workforces. AI represents something of a capital-labor hybrid: companies must still make initial outlays for AI platforms and equipment, but this investment will amount to purchasing independent labor capacity, not merely increased labor efficiency or productivity.
Secondly, AI can enhance the productivity of both human laborers and other physical capital. For instance, equipment downtime is a major concern in the industrial sector, but with the introduction of AI-based monitors, a manufacturer can rest assured that broken or malfunctioning machines will be identified and repaired in as efficient a manner as possible.
Finally, AI has the potential to revolutionize not only how we do things but what we do in the first place. AI systems are capable of performing any number of “human” tasks at an unimaginable speed and scale, but their true value rests with their power to expand the very scope of human endeavors. For example, AI will be able to process huge volumes of information — commonly referred to as “big data” — that the human mind is simply incapable of handling.
Taken together, the economic impact of these factors appears fairly remarkable. The Accenture report found that among the twelve developed economies it studied, AI has the potential to nearly double annual economic growth rates in the coming years. The United States stands to gain the most from widespread AI adoption — the U.S. economy is primed to jump from 2.6% to 4.6% gross value added (GVA) growth over the next two decades, resulting in an additional $8.3 trillion GVA in 2035.
The AI Revolution in Marketing
These long-term general forecasts are encouraging, but in industries like marketing, the value-add of AI technology is already well worth the investment. Indeed, according to Juniper Research, machine learning algorithms will generate $42 billion in annual ad spending by 2021, a substantial increase over the $3.5 billion generated in 2016. What’s more, Forrester has predicted a greater than 300% increase in investment in AI this year as compared to 2016.
Given these figures, astute marketers will want to gravitate toward AI much sooner than 2035. The artificial intelligence revolution in marketing is already on the industry’s doorstep, which is why a platform like Albert™, the world’s first fully-autonomous AI marketing platform, should be a central component of every marketing organization’s strategy moving forward.