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Why AI will be the Catalyst for a new era of productivity growth

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Image by Lin Tong from Pixabay

The dawn of the artificial intelligence (AI) era is often compared to transformative technological advancements such as the steam engine, electricity, and the personal computer. These innovations reshaped industries and daily life, and AI is poised to make an equally revolutionary impact, particularly on global productivity. While the effects of AI are still unfolding, experts believe that its ability to significantly boost productivity could happen in record time—just seven years, compared to decades for earlier technological revolutions.

This optimism comes at a critical juncture in the global economy. Post-pandemic, many countries are grappling with stagnating growth, rising inflation, and mounting debt, alongside the fundamental issue of declining productivity. In fact, several international agencies have noted that the productivity decline following the global economic downturn is unprecedented in recent history. Yet, AI is emerging as a way of hope, offering the potential not only to reverse this trend but to propel productivity to unprecedented heights.

The Economic Impact of AI: A Long-Awaited Leap

The global economy has struggled with low productivity growth for over a decade. For example, U.S. labour productivity growth averaged just 1.68% from 1998 to 2007, a period during which significant technological innovations like the internet and personal computers began to take root. But since 2010, productivity growth has fallen further, dipping to 0.38% between 2010 and 2019.

Some forecasts suggest that generative AI alone could add between $2.6 trillion and $4.4 trillion to the global economy

In this environment, AI is seen as the key to unlocking a new wave of economic efficiency. According to recent reports from the International Monetary Fund (IMF), AI technologies are expected to drive a substantial increase in global productivity. Some forecasts suggest that generative AI alone could add between $2.6 trillion and $4.4 trillion to the global economy.

To understand the potential of AI in the context of productivity growth, it’s useful to compare it to previous technological breakthroughs. The steam engine, for example, took about 60 years to fully transform productivity in manufacturing. Personal computers accelerated productivity growth over 15 years. By contrast, AI is expected to have a profound impact on productivity within just seven years.

Generative AI and Its Promising Future

Generative AI is a form of artificial intelligence that creates new content—whether it’s text, images, or even software code—based on patterns learned from large datasets. The speed with which generative AI is advancing is extraordinary. ChatGPT, released in November 2022, was quickly followed by a more advanced version, GPT-4, and other breakthroughs have appeared throughout 2023. This technology is expanding rapidly, with the capability to process tens of thousands of words in a minute, creating a powerful tool for automating complex tasks.

The applications of generative AI are vast and varied. In the business world, AI systems are already transforming industries like customer operations, marketing, software engineering, and research and development. The banking sector, for example, is projected to see an annual revenue increase of $200 billion to $340 billion through the adoption of AI. The retail and consumer goods sectors could see similar gains, potentially adding up to $600 billion annually.

AI’s potential to automate routine tasks could also free up significant amounts of time for human workers. Studies indicate that generative AI could automate between 60% and 70% of the tasks currently performed by employees, dramatically increasing efficiency. For knowledge-based workers, particularly in high-wage and high-skill sectors, AI is poised to amplify productivity by reducing time spent on routine tasks, such as data analysis, customer service, and administrative work.

Transforming Labour Markets: A Double-Edged Sword

However, the rapid rise of AI is not without its challenges, particularly when it comes to labor markets. Many fear that the widespread adoption of AI could lead to massive job displacement, especially in developed countries where white-collar jobs are more susceptible to automation. According to the IMF, while 30% of U.S. jobs may be at risk of automation by AI, only 13% of jobs in India are likely to be affected, reflecting the differing technological capabilities and labor market structures across the globe.

At the same time, AI’s integration into the economy is expected to create new job opportunities, especially in fields that require advanced technical skills, such as AI development, data science, and cybersecurity. This pattern mirrors historical trends: when previous technological revolutions disrupted the labor market, they also created entirely new industries and job categories. A recent study by MIT found that 60% of the jobs in America today did not exist in 1940, highlighting the constant evolution of the labor market in response to technological innovation.

AI’s Role in Healthcare: Beyond Productivity

AI’s potential extends far beyond traditional sectors like manufacturing or finance. The healthcare industry stands to benefit greatly from AI’s ability to analyze vast amounts of medical data quickly and accurately. For example, AI systems can assist doctors by analyzing scan reports, identifying patterns, and recommending treatment protocols. AI can also reduce the burden of administrative tasks, such as summarizing doctors’ notes and processing insurance claims, thereby improving productivity in healthcare settings while also reducing costs.

Generative AI is now widely recognized as a general-purpose technology (GPT), similar to electricity or the personal computer

Such advancements could lead to significant improvements in healthcare delivery, making it more efficient and cost-effective. This would not only improve outcomes for patients but also contribute to economic growth by lowering healthcare costs for both consumers and governments.

The Path Forward

Generative AI is now widely recognized as a general-purpose technology (GPT), similar to electricity or the personal computer. These technologies have historically contributed to broad-based productivity growth across multiple sectors. The key to AI’s success as a GPT lies in its ability to integrate seamlessly with existing technologies and applications across various industries, driving continuous innovation and productivity gains.

The widespread adoption of AI in industries like logistics, manufacturing, education, and even creative arts has the potential to revolutionize how businesses operate and how workers contribute. As businesses continue to integrate AI into their processes, the resulting efficiencies will likely lead to increased competition, lower prices, and higher wages for workers in industries that embrace these changes.

AI’s transformative potential for global productivity cannot be overstated. Just as the steam engine and personal computers reshaped industries and economies, AI is positioned to trigger an unprecedented leap in productivity across nearly every sector. While challenges related to job displacement and economic inequality remain, the promise of a future in which AI drives substantial economic growth is undeniably exciting.

As AI continues to evolve, it is crucial for businesses, policymakers, and workers to embrace this change, adapting to new technologies and fostering an environment that allows AI to reach its full potential. The future of productivity is unfolding before us, and AI will be at the centre of this revolution.

Society

122 Forests, 3.2 Million Trees: How One Man Built the World’s Largest Miyawaki Forest

Meet the man who has created 122 forests—including the world’s largest Miyawaki ecosystem. His 3.2 million trees are cooling Indian cities, reviving water tables, and restoring biodiversity.

Dipin Damodharan

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RK Nair. Image credit: By special arrangement

In an era when deforestation and climate change threaten ecosystems worldwide, one man from Gujarat—a state on the west coast of India—is rewriting the narrative of environmental restoration.

Dr. Radhakrishnan Nair, fondly known as Nairji, has created 122 forests across India, transforming barren landscapes into thriving ecosystems. His most remarkable achievement, Smritivan (a memorial forest) in Gujarat—recognized as the world’s largest Miyawaki forest—stands as a testament to his vision. Spanning 470 acres and home to over 500,000 trees, this forest is not just a memorial but a beacon of ecological hope. Nair’s work demonstrates how one individual’s determination can combat global warming, restore biodiversity, and inspire communities to embrace a greener future.

Image credit: smritivanearthquakemuseum

From entrepreneur to green crusader

Born in Kasaragod, Kerala, R.K. Nair’s path to becoming India’s “Green Hero” was anything but conventional. After failing his 12th-grade exams, he took on a series of odd jobs, eventually rising to become a successful entrepreneur in the garment industry. But a pivotal moment came in 2011, in Umargam, Gujarat, when he witnessed the felling of 179 ancient trees for road construction. The cries of displaced birds and the destruction of their habitat struck a deep chord.

“I felt the birds were speaking to me,” Nair recalls. “That day, I vowed to create forests where no one would harm them.”

This epiphany led to the founding of Forest Creators with his friend Deepan Jain in 2014. Using corporate social responsibility (CSR) funds, Nair began planting trees—starting with 1,500 saplings on a single acre. Today, he has planted over 3.2 million trees across 12 Indian states—from Gujarat to Chhattisgarh, Rajasthan to Uttar Pradesh. His approach blends the Japanese Miyawaki method, known for rapid and dense forest growth, with a localized adaptation he calls Bharatavanam, tailored to India’s diverse ecosystems.

Smritivan: A green miracle in the Desert

Nair’s crowning achievement is Smritivan, a sprawling forest in Bhuj, Gujarat, established in memory of the 13,805 victims of the 2001 Gujarat earthquake. Originally conceived in 2004 but long stalled, the project gained new life when Nair took charge. Despite the 470-acre terrain being arid and hilly, he began planting in July 2021. “By August 2022, when Prime Minister Narendra Modi inaugurated the memorial, the forest had reached an astonishing 16 feet in height, with 223,555 saplings planted in the first phase alone. Today, Smritivan houses over 525,000 trees, with plans to add 40,000 more,” Nair says, in an interview with EdPublica.

A report from the Gujarat Ecology Commission, accessed by EdPublica, highlights Smritivan’s ecological transformation. Now home to 117 tree species, the forest supports 79 bird species, 28 types of butterflies, 21 reptiles, nine mammals, and two species of fish. The dense canopy and mulched soil prevent erosion, retain moisture, and enrich the land with organic matter. “With an 86% tree survival rate, species like neem and casuarina are flourishing,” according to the report published in 2023.

Image credit: By special arrangement

The forest has also led to localized temperature reductions, while its 50 check dams help replenish groundwater. A one-megawatt solar plant further bolsters its sustainability, making Smriti Van a global model of eco-restoration.

A report from the Gujarat Ecology Commission, accessed by EdPublica, highlights Smritivan’s ecological transformation. Now home to 117 tree species, the forest supports 79 bird species, 28 types of butterflies, 21 reptiles, nine mammals, and two species of fish

Industrialist Anand Mahindra recently shared a viral post on X, praising Nair for building the world’s largest Miyawaki forest.

Ecological impact: Restoring balance

Nair’s forests are more than green patches—they are ecological engines. “In Chhattisgarh, the coastal forest of 103,000 trees raised groundwater levels dramatically—from 160 feet to just 12 feet—reviving wells and sustaining communities,” Nair claims. Across India, his forests have restored biodiversity, attracted wildlife, and helped rebuild natural food chains.

The Gujarat Ecology Commission underscores Smriti Van’s role in carbon sequestration, a vital tool against climate change. Experts recommend ongoing assessments to quantify its carbon storage potential, which could significantly offset emissions.

Nair’s method ensures long-term ecological success. He doesn’t merely plant trees—he nurtures ecosystems. By selecting native species suited to local conditions, his forests are resilient and sustainable. They grow 10 times faster than natural forests, mimicking 150-year-old ecosystems in just 10–15 years. Dense planting (3–4 saplings per square meter) encourages vertical growth, mimicking natural competition for sunlight.

A Vision for the future

Nair’s ambition is bold: planting one billion trees by 2030. Backed by governments, corporations, and citizens, Forest Creators is scaling up to meet this audacious goal. His work has earned international acclaim, including an invitation to represent India at a NASA conference and a UNESCO Prix Versailles award for Smritivan.

Yet, Nair remains grounded—dressed in his signature white mundu, shirt, and cap—a nod to his Malayali roots and the spirit of India’s farmers.

Beyond ecology, Nair’s forests are also community spaces. Smriti Van has become a popular destination for its tranquil trails and vibrant festivals, with 94% of surveyed visitors citing its fresh air and peacefulness. Future plans include guided tours and educational programs to engage youth in environmental stewardship.

A Global inspiration

R.K. Nair’s story is a clarion call for individual action in the face of global crises. His 122 forests—especially the monumental Smritivan—showcase what one person’s vision and persistence can achieve. By restoring biodiversity, cooling urban climates, and sequestering carbon, Nair’s work supports global efforts to fight climate change. As he marches toward his billion-tree goal, he reminds us that a single seed, planted with purpose, can grow into a forest of change.

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The Rise of U.S. Retail Giants: A Century of Political and Economic Shaping

Currently, 90% of Americans live within 10 miles of a Walmart, and five of the top 10 U.S. employers—Walmart, Amazon, Home Depot, Kroger, and Target—are retailers

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MIT political scientist Kathleen Thelen’s new book, “Attention, Shoppers!”Credits:Photo: Gretchen Ertl

The U.S. retail sector, once dominated by small, independent merchants, has transformed over the past century into a landscape controlled by retail giants. In the late 19th century, most U.S. retail was local. However, this shifted with the rise of catalog retailers like Sears and Roebuck, which saw rapid growth, followed by Montgomery Ward’s expansion. By the 1930s, chain stores began to proliferate, with the Atlantic and Pacific (A&P) supermarkets leading the pack with over 15,000 locations.

Fast-forward to today, and the dominance of retailers like Walmart, Amazon, and Target is undeniable. Currently, 90% of Americans live within 10 miles of a Walmart, and five of the top 10 U.S. employers—Walmart, Amazon, Home Depot, Kroger, and Target—are retailers. In addition, logistics giants UPS and FedEx play a crucial role in supporting the retail economy.

This prevalence of massive retail chains is largely unique to the U.S., where domestic consumption is a driving force behind economic growth. Additionally, the U.S. has five times as much retail space per capita as Japan and the U.K., and 10 times as much as Germany. Unlike in Europe, the U.S. has few regulations limiting shopping hours.

How did we arrive at this point? While major chains like Walmart and Amazon are known for their business prowess, the full story involves over a century of political and legal debates that shaped the landscape of U.S. retailing. MIT political scientist Kathleen Thelen, in her new book Attention, Shoppers! American Retail Capitalism and the Origins of the Amazon Economy, dives into the role of political and legal forces in the rise of large, low-cost retailers.

“The markets that we take as given, that we think of as the natural outcome of supply and demand, are heavily shaped by policy and by politics,” Thelen explains.

Thelen’s book offers a unique perspective, drawing comparisons with European economies and taking a historical approach to the growth of chain retailing. For instance, she highlights how alternative commercial arrangements, like cooperatives, were stifled by U.S. antitrust laws, which favored big corporations while suppressing smaller competitors. This legal framework gave a significant advantage to large retailers, including Sears, which relied on the U.S. Postal Service’s money order system to reach customers who lacked bank accounts.

Smaller retailers resisted the expansion of large chains, particularly during the Great Depression, but big retailers found ways around regulatory constraints. “Antitrust laws in the United States were very forbearing toward big multidivisional corporations and very punitive toward alternative types of arrangements like cooperatives, so big retailers got a real boost in that period,” Thelen says. Over time, antitrust law increasingly prioritized consumer prices, further benefiting low-cost retailers.

As Thelen argues, prioritizing price reduction often leads to lower wages for workers, with large retailers driving down wages both directly and through pressure on suppliers. “If you prioritize prices, one of the main ways to reduce prices is to reduce labor costs,” she says, noting that low-cost discounters are often low-wage employers.

In her analysis, Thelen suggests that the American retail system’s focus on low prices, low wages, and high consumer convenience has led to a “deep equilibrium,” where low-wage workers rely on these retail giants to make ends meet. Meanwhile, the speed of modern delivery systems has become a normal part of American shopping culture.

“The triumph of these types of retailers was not inevitable,” Thelen reflects. “It was a function of politics and political choice.” With ongoing debates about labor law reforms and antitrust enforcement, the current retail equilibrium may persist for the foreseeable future, unless significant changes are made to the system.

Through Attention, Shoppers!, Thelen offers readers a comprehensive look at the economic forces that have shaped the retail sector, helping explain the giant retail landscape many Americans take for granted today.

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Jio Joins Forces with SpaceX’s Starlink to Bring High-Speed Internet to India

India’s richest man Mukesh Ambani’s Jio Partners with SpaceX for a Digital Revolution

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In a groundbreaking move, Jio Platforms Limited (JPL), a subsidiary of India’s Reliance Industries Limited, has announced a strategic partnership with SpaceX to offer Starlink’s high-speed broadband internet services across India. This collaboration comes as part of Jio’s ambition to expand its broadband offerings and transform connectivity in the country, especially in rural and remote areas.

The partnership between Jio, led by India’s richest man, Mukesh Ambani, and SpaceX, led by US billionaire Elon Musk, marks a significant step in bridging the digital divide and accelerating India’s digital ecosystem. By bringing Starlink’s advanced low Earth orbit (LEO) satellite internet into its fold, Jio is positioning itself at the forefront of India’s broadband evolution, promising to provide affordable and high-speed internet to even the most remote corners of the country.

Through this agreement, Jio will integrate Starlink’s services into its vast network, offering them to both consumers and businesses across India. Customers will be able to access Starlink’s solutions through Jio’s retail outlets as well as its online platforms, ensuring a seamless and efficient experience for users nationwide.

“Ensuring that every Indian, no matter where they live, has access to affordable and high-speed broadband remains Jio’s top priority,” said Mathew Oommen, Group CEO of Reliance Jio, in a statement. “Our collaboration with SpaceX to bring Starlink to India strengthens our commitment and marks a transformative step toward seamless broadband connectivity for all. By integrating Starlink into Jio’s broadband ecosystem, we are expanding our reach and enhancing the reliability and accessibility of high-speed broadband in this AI-driven era, empowering communities and businesses across the country.”

Jio’s extensive infrastructure, paired with Starlink’s pioneering satellite technology, will address the connectivity challenges in India’s most underserved areas, ensuring the benefits of the digital age are accessible to all. The collaboration will also allow Jio to complement its existing broadband services, such as JioAirFiber and JioFiber, by providing high-speed internet in hard-to-reach locations more quickly and affordably.

Additionally, Jio and SpaceX are exploring further areas of collaboration, looking for innovative ways to strengthen India’s digital landscape. Gwynne Shotwell, President and Chief Operating Officer of SpaceX, commented, “We applaud Jio’s commitment to advancing India’s connectivity. We are looking forward to working with Jio and receiving authorization from the Government of India to provide more people, organizations, and businesses with access to Starlink’s high-speed internet services.”

In an interesting twist, Jio’s partnership with Starlink comes just one day after India’s second-largest telecom operator, Airtel, also signed a deal with Starlink. This move indicates that India’s telecom sector is witnessing a significant transformation as leading operators race to offer cutting-edge broadband services through satellite technology, further boosting the country’s digital revolution.

As part of its long-term strategy, Jio continues to innovate and diversify its offerings, positioning itself as a leader in the broadband space with cutting-edge solutions. With this collaboration, Jio not only aims to enhance the reach of its broadband services but also solidifies its role in advancing India’s goal of becoming a global leader in the digital economy.

The union of Jio’s expansive infrastructure and SpaceX’s space-based internet promises to accelerate India’s journey toward becoming a digitally connected nation, ensuring that no part of the country is left behind in the fast-evolving digital landscape.

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