The World s Economic Development - amazonia.fiocruz.br

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Please click "Accept" to help us improve its usefulness with additional cookies. Learn about our use of cookies, and collaboration with select social media and trusted analytics partners here Learn more about cookies, Opens in new tab. The role of artificial intelligence DDevelopment tools and techniques in business and the global economy go here a hot topic. This is not surprising given that AI might usher in radical—arguably unprecedented—changes in e way people live and work. The AI revolution is not in its infancy, but most of its economic impact is yet to come.

First, it builds on an understanding of the behavior of companies and the dynamics of various sectors to develop a bottom-up view of how to adopt and absorb AI technologies. Second, it takes into account the likely disruptions that countries, companies, and workers are likely to experience as they transition to AI. There will very probably be costs during this transition period, and they need to be factored into any estimate. The analysis examines how Develpoment gains and losses The World s Economic Development likely to be distributed among firms, employees, and The World s Economic Development and how this distribution could potentially hamper the capture of AI benefits.

Third, the research examines the dynamics of AI for a wide range of countries—clustered into groups with similar characteristics—with the aim of giving a more global view. The analysis should be seen as a guide to the potential economic impact of AI based on the best knowledge available at this stage. Among the major findings are the following:.

A key challenge is that adoption of AI could widen gaps among countries, companies, and workers

The Devleopment Global Institute looked at five broad categories of AI: computer vision, natural language, virtual assistants, robotic process automation, and advanced machine learning. Companies will likely use these tools to varying degrees. Some will take an opportunistic approach, testing only one technology and piloting it in a specific function an approach our modeling calls adoption. Others might be bolder, adopting The World s Economic Development five and then absorbing them across the entire organization an approach we call full absorption. In between these two poles, there will be many companies at different stages of adoption; the model also captures this partial impact. By Economix, the average simulation shows that some 70 percent of companies might have adopted at least one type of AI technology but that less than half will have fully absorbed the five categories.

The pattern of adoption and full absorption might be relatively rapid—at the high end of what has been observed with other technologies. For instance, late adopters might find it difficult to generate impact from AI, because front-runners have already captured AI opportunities and late adopters lag in The World s Economic Development capabilities and link talent.

This amounts to 1. If delivered, this impact would compare well with that of other general-purpose technologies through history. A number of factors, including labor automation, innovation, and new competition, affect AI-driven productivity Devflopment. Micro factors, such as the pace of adoption of AI, and macro factors, such as the global connectedness or labor-market structure of a country, both contribute to the size of the impact.

Our simulation examined seven possible channels of impact. The first three relate to the impact of AI adoption on the need for, and mix of, production factors that have direct impact on company productivity. The other four are externalities linked to the adoption of AI related to the broad economic environment Econnomic the transition to AI. We acknowledge that these seven channels are not definitive or necessarily comprehensive but rather a starting point based on our current understanding and The World s Economic Development currently under way Exhibit 1. The impact of AI might not be linear but could build up at an accelerating pace over time. Its contribution to growth might be three or more times higher by than it is over the next five years.

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An S-curve pattern of adoption and absorption of AI is likely—a slow start due to the substantial costs and investment associated with learning and deploying these technologies, then an acceleration driven by the cumulative effect of competition and an improvement in complementary capabilities alongside process innovations.

The size of benefits for those who move early into these technologies will build up in later years at the expense of firms with limited or no adoption. Potentially, AI might widen gaps between countries, reinforcing the current digital divide. Countries might need different strategies and responses as AI-adoption rates vary.

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Leaders of AI adoption mostly in developed countries could increase their lead over developing countries. Leading AI countries could capture an additional 20 to 25 percent in net economic benefits, compared with today, while developing countries might capture only Developmeent 5 to 15 percent. Many developed countries might have no choice but to push AI to capture higher productivity growth as their GDP-growth momentum The World s Economic Development many cases, partly reflecting the challenge due to aging populations.

Moreover, in these economies, wage rates are high, which means that there is more incentive to substitute labor with machines than there is in low-wage, developing countries.]