A new report by McKinsey & Company suggests generative artificial intelligence (AI) technologies could boost global economic output by trillions of dollars annually. The study, titled “The Economic Potential of Generative AI” and published June 14, 2023, analyzes the impact AI tools like Chatgpt could have across sectors.
McKinsey & Company Study: ‘Generative AI Is Poised to Unleash the Next Wave of Productivity’
The consulting firm McKinsey & Company estimates generative AI could add $2.6 to $4.4 trillion in global value per year by enhancing productivity across 63 different use cases. This would increase AI’s overall contribution to the economy 15-40% above previous projections that did not account for advances like natural language processing. The study emphasizes that industries ranging from banking to pharmaceuticals are poised to reap the most rewards in terms of revenue share.
The report cautions that realizing the full potential requires adapting business practices and reskilling workforces for new roles. Although, McKinsey & Company says rapid adoption could boost annual global productivity growth up to 0.6 percentage points through 2040. Researchers say it underscores the importance of understanding where generative AI can create the most value as companies race to implement applications.
However, the report’s authors insist excitement over expanding capabilities needs tempering to address risks around misinformation, security, and job losses in automated work. Supporting transitions to new types of work will be pivotal to ensuring economic gains don’t accrue disproportionately. On the other hand, McKinsey & Company researchers say if AI is thoughtfully implemented, the scale of opportunity makes generative AI’s emergence a watershed for global growth.
Goldman Sachs Research Study Concurs, ‘Generative AI Could Raise Global GDP by 7%’
McKinsey & Company is not the only organization that sees economic growth in generative AI. Goldman Sachs Research also suggests that breakthroughs in generative AI have the potential to bring about sweeping changes to the global economy, driving a 7% (or almost $7 trillion) increase in global GDP. The investment bank said on April 5, 2023, that advances in AI tools using natural language processing could also lift worldwide productivity by 1.5 percentage points through 2033.
“Despite significant uncertainty around the potential for generative AI, its ability to generate content that is indistinguishable from human-created output and to break down communication barriers between humans and machines reflects a major advancement with potentially large macroeconomic effects,” wrote Goldman Sachs economists Joseph Briggs and Devesh Kodnani in their April 5 report titled “Generative AI could raise global GDP by 7%.”
The economists estimate this new wave of AI systems may also have a major impact on employment, with shifts in workflows potentially exposing the equivalent of 300 million full-time jobs to automation. Analyzing databases detailing the task content of over 900 occupations, Goldman estimates roughly two-thirds of U.S. jobs are exposed to some degree of automation by AI. The bank says up to half the workload in exposed occupations could be replaced, but not all automated work will lead to layoffs.
While McKinsey & Company and Goldman Sachs are optimistic about AI, the year before, many financial institutions were excited about the metaverse hype, which did not pan out well the following year.
Do you think generative AI will have that much of an impact on the economy? Share your thoughts and opinions about this subject in the comments section below.