Society

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

Published

4 weeks ago

November 5, 2024

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.

Related Topics:artificial intelligence generative ai lead productivity

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Society

Meet the 14-year-old boy who teaches his own teachers

Published

4 days ago

November 29, 2024

EP Staff

Picture this: a 14-year-old boy teaching classes to his own teachers at his school. Raul John Aju, a young prodigy from Edappally Government Vocational Higher Secondary School, Kerala, India, had the unique opportunity to do just that at Huddle Global 2024, India’s flagship startup festival, organized by Kerala Startup Mission (KSUM) at Kovalam.

Raul’s extraordinary achievement is the result of his exceptional expertise in Artificial Intelligence and Robotics, which he has acquired through years of dedication and passion since childhood.

The teen’s profound knowledge of AI and Robotics was showcased during the opening session of the three-day festival.

In his session titled ‘Dream Big, Code Bigger – Shaping the Future with Technology’, Raul captivated the audience by demonstrating how AI tools can empower anyone to start a business on their own.

“AI applications can be leveraged to build a startup from the ground up. Whether it’s developing a business model or assessing the feasibility of your product, AI can help create websites, design logos, and assist in business presentations and marketing,” Raul explained, drawing enthusiastic responses from the crowd.

He further emphasized that AI can streamline every aspect of a startup’s verticals, making the process more efficient and accessible.

Raul has also created an AI-powered legal assistant called ‘Nyaya Sathi’. This free bot provides instant legal information to ordinary citizens, making legal advice more accessible to the public.

Apart from his innovations, Raul teaches AI to international students and employees in the US and UK, covering topics like machine learning, deep learning, and AI language models.

“I use AI to generate presentations for my classes, which saves me a lot of time while balancing my studies and other activities,” Raul shared. He strongly believes that AI isn’t going to replace jobs, but rather, people who are skilled at using AI will shape the future workforce.

“AI is both the present and the future. It boosts productivity, increases revenue, and will unlock a world of new possibilities,” Raul asserted, citing statistics that show how AI has improved efficiency for major corporations.

Society

Evolve or Dissolve

Published

7 days ago

November 27, 2024

Dr. Sudheer Babu

Image credit: Pixabay

In today’s fast-paced world, a mobile phone has become an essential part of everyday life, serving as a critical tool for communication and connectivity. Initially, you might purchase a phone to meet basic needs, such as making and receiving calls, staying within a budget. However, as time goes on, your requirements evolve. What once was sufficient for simple communication now must accommodate email, social media, and various applications. This necessity for upgraded technology mirrors a broader trend seen with many products and services over time.

This constant evolution of consumer needs and desires drives the market. People continuously seek new products that promise a positive impact on their lives, not just for functionality but also for the added value and enhanced experience these new products bring. For instance, while an Android phone might fulfill all your basic needs, the allure of an iPhone might stem from its perceived prestige and the belief that it enhances your life more positively.

Such dynamic between needs and desires influences consumer behaviour. Take, for instance, a professional runner. They require sports shoes that offer lightweight comfort and durability, essential for optimal performance. However, they are also drawn to the latest designs and cutting-edge technologies, believing these will give them a competitive edge.

Nike’s customer base is a perfect example of this phenomenon. Athletes purchase the latest models tailored to their specific sports, focusing on performance and technology. In contrast, casual users often prioritize aesthetics and brand prestige, reflecting different motivations—practical needs versus aspirational desires.

The interplay of needs and desires propels innovation, encouraging consumers to replace old products with new ones that promise greater benefits

Ultimately, consumers aim to continuously improve their lives by seeking products that simplify and enhance their experiences. Companies that recognize and deliver on these evolving expectations create lasting value, ensuring their long-term success. Selling products is not merely about transactions but about enriching consumers’ lives, making each purchase a step towards a better, more fulfilling life.

The interplay of needs and desires propels innovation, encouraging consumers to replace old products with new ones that promise greater benefits. This pursuit of continual improvement and innovation reflects a universal aspiration—to enhance life’s quality and enjoy the positive impacts of new, advanced products. Whether driven by necessity or desire, consumers consistently look for ways to improve their lives, and businesses must align with these evolving demands to succeed.

EDUNEWS & VIEWS

UFS scientists recognized among the World’s Top 2% for 2024

Published

1 week ago

November 26, 2024

EP Staff

Prof Abdon Atangana from the UFS Institute for Groundwater is again the highest-ranked scientist from the institution

Scientists from the University of the Free State (UFS) have earned global recognition for their research, with several faculty members named in the prestigious World’s Top 2% Scientists list for 2024. Compiled by Stanford University in partnership with Elsevier and based on data from Scopus, this list honours researchers whose work has made significant contributions to their fields and garnered worldwide recognition.

The ranking evaluates scientists using standardised citation metrics, including h-index, article citations, and other performance indicators, to identify the most influential scholars across various disciplines.

Prof Vasu Reddy, UFS Deputy Vice-Chancellor for Research and Internationalisation, expressed his pride in the achievement, stating: “The coveted Stanford-Elsevier list showcases top-notch scholars globally in the fields of science, engineering, business, public affairs, and the human sciences. We at the UFS are filled with pride and excitement to see our scholars who are making a positive mark in global research efforts.”

Top Performers from UFS

Prof Abdon Atangana, a leading researcher at the UFS Institute for Groundwater, is once again the highest-ranked UFS scientist on the list, securing the 391st position worldwide and 2nd out of 2,137 authors in Applied Mathematics. Prof Karl Peltzer, Research Fellow in the Department of Psychology, also earned recognition, ranking 4,806 globally and 47th among over 69,000 authors in Public Health.

Prof Reddy remarked, “The UFS is filled with immense inspiration and joy to celebrate our academics whose vision and dedication must serve as a true inspiration for all of us collectively at UFS. You are people, through your ideas and research, who drive real-world solutions to complex wicked problems and challenges.”

New Additions to the List

Several UFS researchers have made their debut on the prestigious list this year. These include Prof Felicity Burt, Principal Medical Scientist in Virology; Prof Yonas T Bahta, Professor in Agricultural Economics; Dr Andronicus Akinyelu, Lecturer in Computer Science and Informatics; Prof Abiodun A Ogundeji from the Disaster Management Training and Education Centre for Africa; and Dr Marieka Gryzenhout, Senior Lecturer in Genetics.

Dr Gryzenhout, who focuses on medicinal mushrooms, expressed her surprise at the recognition: “There are truly prolific and renowned researchers out there with impressive publication records and impactful research.” She attributed her success to impactful and relevant research, networking, and long-term citation of her work.

Notable Achievements and Contributions

Dr Anand Krishnan, Senior Lecturer in Chemical Pathology and a leader in nano diagnostic and therapeutic research, reflected on his inclusion in the list as a testament to his extensive contributions. “Being acknowledged in this elite group is a tremendous honour. It validates my commitment to advancing research in precision medicine and nano diagnostics,” he said. Dr Krishnan’s scholarly output includes over 127 published articles, eight books, and 22 book chapters, solidifying his reputation in global research.

Prof Yonas T Bahta, a National Research Foundation (NRF) C2-rated researcher, made his first appearance on the list, ranked 229,449 globally. “Being named in the Top 2% signifies global recognition for research excellence and enhances a scientist’s reputation within academia and industry,” he said. Prof Bahta’s research focuses on the social and economic impacts of water use behavior and agricultural drought in South Africa.