AI Will Add $15.7 Trillion to the Global Economy

  • PwC says global GDP to be 14% higher in 2030 as a result of AI
  • ‘Man and machine together can be better than the human’

Artificial Intelligence Powers Ahead

Artificial intelligence may not be so threatening after all.

Amid warnings of the economic disruption that robots and automation could unleash on the world economy as traditional roles disappear, researchers are finding that new technologies will help fuel global growth as productivity and consumption soar.

AI will contribute as much as $15.7 trillion to the world economy by 2030, according to a PwC report Wednesday. That’s more than the current combined output of China and India.

Gains would be split between $6.6 trillion from increased productivity as businesses automate processes and augment their labor forces with new AI technology, and $9.1 trillion from consumption side-effects as shoppers snap up personalized and higher-quality goods, according to the report.

“The mindset today is man versus machine,” Anand Rao, an AI researcher at PwC in Boston, said at a briefing Tuesday at the World Economic Forum’s Annual Meeting of the New Champions gathering in Dalian, China, where the report was released. “What we see as the future is man and machine together can be better than the human.”

Global GDP, which stood at about $74 trillion in 2015, will be 14 percent higher in 2030 as a result of AI, according to PwC’s projections.

Air Hockey

At the seaside venue, where global business executives, researchers and officials rubbed shoulders, a robot played air hockey with attendees, delegates were invited to build robots in workshops, and AI was a recurring theme at panel discussions and chats on the sidelines.

PwC found that the world’s second-biggest economy stands to gain more than any from AI because of the high proportion of gross domestic product derived from manufacturing.

“The impact of AI on China will be huge and greater even than the impact on the U.S.,” Rao told reporters at a briefing on the report.

Accenture Plc also released an estimated value this week. AI could increase China’s annual growth rate by 1.6 percentage point to 7.9 percent by 2035 in terms of gross value added, a close proxy for GDP, adding more than $7 trillion, according to a report from the firm released Monday with Frontier Economics.

Labor Market

Advances are rapid, and pose mixed results for the labor market, according to Tom Mitchell, a professor in the machine learning department at Carnegie Mellon University in Pittsburgh. Computers, poor at recognizing images and items a decade ago, have gone from 50 percent accuracy to 95 percent, and now can use a higher intelligence, different than hearing and seeing, that involves a chain of logical reasoning, Mitchell said Thursday in a talk in Dalian.

"Some jobs are being eliminated, many routine clerical jobs, toll booth operators," he said. "There are other jobs, like doctor jobs, where AI is not replacing them but making them better by augmenting their capabilities. There’s another force at work where AI and information technology more broadly are creating new kind of business models, like Uber."

AI also involves risk. Regulators are wary of rapidly developing systems that they have little oversight of, and there are lingering suspicions about erosion of privacy and that the ultimate effect of AI could do more harm than good for people’s jobs and livelihoods.

Tech Cornucopia

"We need to find ways to deal with any negative societal impacts that might happen, such as technological unemployment," Wendell Wallach, an ethicist and scholar at Yale University’s Interdisciplinary Center for Bioethics, said on a panel Tuesday. "We have a moral obligation to make sure that technologies we put in place serve humanity as a whole, not just a small segment of it, nor a small segment of those who are best able to capitalize on technological advances."

Rapid technological advances have nurtured Silicon Valley heroes over the past 15 years, but more work must be done to boost economic growth for more people, according to Tyler Cowen, an economics professor of George Mason University, in Fairfax, Virginia, and co-author of the economics blog Marginal Revolution.

“If you’re reading that we’re receiving a new technological cornucopia of new products, basically that can’t be true," Cowen said at on a forum panel. "It would be showing up in the real wages of most people."

— With assistance by Enda Curran, and Xiaoqing Pi

    Before it's here, it's on the Bloomberg Terminal.