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AI to bring 15.7 trillion USD to the global economy by 2030 – some concrete examples


PricewaterhouseCoopers (PWC) in 2017 estimated that Artificial Intelligence will bring $15.7 trillion USD to the global economy by 2030.


This is a hefty prediction considering that now in May 2020 United States GDP is about 20.5 trillion USD and China’s GDP is 13.6 trillion USD.


How does this actually happen in practice? What are businesses doing differently with AI technologies to generate this additional value?


Are customer service chat-bots really going to bring in trillions of dollars?

PWC predicts the gains will come from two broad outcomes:

· 6.6 trillion USD from productivity gains

· 9.1 trillion USD from consumption side-effects

We will explore these with some concrete examples.


Extreme Productivity Gains – Ant Financial

Productivity gains might not be the right term for Ant Financial. More like a company has been created that makes such extensive use of AI that productivity is so far beyond what traditional finance companies have been able to achieve.


The financial services company is an affiliate of the giant Alibaba Group. In 2019, just 5 years after launch the company reached 1 billion customers.

This is 10 times more customers than the US’s biggest banks, but here’s the kicker… it does this with just 1/10th the number of employees.

AI is ingrained deeply into the fabric of Ant Financial. The company uses the technology to provide an enormous range of automated services – money lending, health insurance, credit services… the list goes on. Many of these services are provided without any direct human engagement and processing.

An individual can sign up for a loan on her mobile phone and provide all her details such as income, assets, and liabilities. An automated system from Ant Financial will take all that information and estimate the likelihood of that person paying or defaulting on the loan in the future, and then proceed to lend the money if that likelihood is acceptable.

It’s a big data approach compared to a human expert, and with 1 billion customers you have some serious data to make an informed decision when coupled with technology like machine learning.

When you no longer need your employees to approve a loan, the sky is the limit to how many can be processed on a day-to-day basis. This occurs not just for loans, but for all other services provided by the company.

This is how you have 10x the customers with 1/10th the employees.


Consumption Side-effects

9.1 trillion USD from consumption side-effects. Consumption what?

This is referring to the consumer's (i.e. you and me) rate of purchasing goods and services. AI, through levering big data grants the ability for greater understanding of consumers; their desires, and purchasing habits.

When we log into our Google account, our Facebook account, and our Amazon account, our actions are being recorded. Not in the sense that there is an individual personally tracking you through a camera or looking at your browsing history, but rather your data is stored alongside millions of other users.

Automated systems can then estimate your personality and habits through comparison with millions of other people. From these estimations, you can automatically be recommended goods and services that you are more likely to purchase.

This is one type of consumption side-effect that the report was referring to. AI brings mass gains in productivity, leading to more wealth for a society (however that is distributed) and it also leads to more spending (consumption) by that society.

Amazon is a perfect example of where this is happening. Seen the product recommendations after you purchase a product?


Those aren’t random; those are for you.


Amazon has built a store just for you.

Amazon has compared your activities across its platform with other similar users and is estimating what you will most likely be willing to like and purchase.

At a guess, this probably isn’t just limited to purchasing history, but also to your activities depending on the season, time of day, and a whole host of other seemingly secondary considerations.

This isn’t necessarily a bad thing. With endless millions of products for sale online this might just be a blessing that an automated system can find what you think is interesting.

Conclusion

We discussed a few examples of how AI may bring 15.7 trillion USD to the global economy by 2030.

Through extreme productivity gains from companies such as Ant Financial, and from consumption side-effects through companies such as Google, Facebook, and Amazon.

There are many other examples and types of gains but hopefully, this gives you some idea of the implications of the technology.

The application of AI is already having a big impact, yet remains largely invisible. It’s not the clunky chat-bots that we see everywhere that drive the increase, it’s the invisible applications that we unknowingly interact with every day.


Where do you see the greatest benefits from AI?

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