The technology’s benefits for production will be more pronounced in high-income economies, according to a survey by the WEF
Leading economists surveyed by the World Economic Forum are notably more optimistic about the benefits of AI in high-income countries than in developing economies and see the technology boosting inequality, according to the latest Chief Economists Outlook, released on Monday.
As the global economy grapples with headwinds from tight financial conditions and geopolitical rifts while adapting to rapid advancements in generative AI, the economists expect geo-economic fragmentation to accelerate this year.
The majority of those surveyed expect the productivity gains from AI to become economically significant in wealthier countries in the next five years. The views are somewhat more divided on the likelihood of generative AI resulting in a decline in trust across both high-income and low-income economies this year.
These benefits of AI expected by the economists include improvements in the efficiency of production and innovation. However, the picture is more mixed when it comes to the effect on standards of living.
The survey revealed a divergence in likely outcomes among different income groups regarding the impact of generative AI on productivity over the next year: 79% expect an increase in the efficiency of output in high-income economies, compared to only 38% for low-income economies.
“No respondents said productivity benefits will never materialize, reflecting an expectation that AI will have a sustained and far-reaching impact on the global economy,” the report stated. According to the most optimistic scenario examined in the WEF survey, the widespread deployment of AI could help raise global output by as much as 30% by the end of the century.
When asked about the regions poised to see a significant increase in productivity from higher AI adoption, the economists said they expect the US, China, Europe, and East Asia and the Pacific to benefit the most in the next three years.
The outlook projects a possible increase in annual revenue in the banking and pharmaceutical industries of as much as 5%. Nearly three-quarters of AI-enabled productivity gains across industries are expected to be facilitated by improvements in research and development, customer services, marketing and sales, and software engineering.
The upbeat predictions about the economic gains from AI have been accompanied by broad-based anxiety about the possible implications of the technology for jobs, inequality and society in general. Respondents voiced concerns about the risks of automation, job displacement, and degradation. Nearly three-quarters of the chief economists surveyed do not foresee a net positive impact on employment in low-income economies, while another 17% are uncertain. In other words, the majority expect displacement, the report noted.
“While the evidence of the broader effect on the workforce is still evolving, there are signs of consensus that AI is likely to transform rather than destroy work in the near term, with a potentially detrimental impact on job quality. Such shifts in consumer power are likely to dampen growth across economies, although it is unclear if the magnitude would offset gains through productivity benefits,” the WEF wrote.
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