Sizing the Prize: Artificial intelligence’s impact around the world

We recently conducted a study on the impact of AI across the globe. We found that some economies have the potential to gain more than others from AI in both absolute and relative terms. Notably, China and North America are likely to see the biggest impact, though all economies should benefit.

North America

In North America, the potential uplift to GDP from AI will be amplified by the huge opportunities to introduce more productive technologies, many of which are ready to be applied. And the gains will be accelerated by the advanced technological and consumer readiness for AI, along with the impact of rapid accumulation of assets – not just technology, but data touchpoints and the flows of information and customer insight that come with them.

North America is likely to see the fastest boost in the next few years. While the impact will still be strong from the middle of the 2020s, it probably won’t be quite as high as in the earlier years. One of the main reasons is that as productivity in China begins to catch up with North America, this will stimulate exports of AI-enabled products from China to North America.

China

The high proportion of Chinese GDP that comes from manufacturing heightens the potential uplift from introducing more productive technologies. It is likely to take some time to build up the technology and expertise needed to implement these capabilities and therefore the GDP boost won’t be as rapid as the US. But in around ten years’ time, the productivity gains in China could begin to pull ahead.

A key part of the value potential comes from the higher rate of capital re-investment within the Chinese economy compared to Europe and North America, as profits from Chinese businesses are fed into increasing AI capabilities and returns. AI will also play an important part in the shift to a more consumer-oriented economy on the one hand and the move up the value chain into more sophisticated and high tech-driven manufacturing and commerce on the other. The focus and investment are amply demonstrated by the surge in AI patents filed in China. For example, the number of AI patents filed during the past two 5-year periods (2005-09 vs 2010-14) increased by 26% for US and 186% for China (See here for more details). Similarly, there is a surge in papers published in advanced research areas of AI, like Deep Learning from China. An acceleration in talent development in areas such as analytics will be crucial in realizing the potential gains from AI within the Chinese economy.

There are many more interesting findings on the impact AI will have on the global economy – such as the business areas with the greatest AI potential as well as a sector breakdown of what will most impacted by AI in the years to come – in our study. Be sure to check it out here.