Which Impact Will Have AI on the Global Economy?

AI has become one of the most desired technological developments in recent years. According to various academic sources and other studies, AI is likely to significantly transform the economic landscape in the coming years. A study by the auditing firm PwC estimates that AI could contribute up to $15.7 trillion to the global economy by 2030, representing a 14% increase in value added compared to current global GDP. According to PwC, this growth would come mainly from increased labour productivity, the creation of new jobs and the optimisation of production processes. The consulting firm McKinsey & Co. estimates that AI could add +0.8% to +1.4% to annual global GDP growth in the long term, based on gains linked to labour substitution. Finally, Accenture cites the possibility that AI could double the pace of US growth from an average of +2.6% to +4.6% through intelligent automation, the increase in the theoretical workforce through AI and the general diffusion of innovation.

Overall, AI could have impacts on the global economy through three channels, production, demand, and externalities.

• Production: increasing human capacity with the help of AI would allow for better production. The substitution of certain production factors such as labour is possible given the potential for automation of repetitive tasks. Finally, innovation would be accelerated thanks to the possibility of developing new products and services.
• Demand: Consumption could be stimulated by access to more and higher quality services through AI-enabled improvements: the PwC study estimates that 58% of value added gains by 2030 will be explained by consumption. Greater personalisation of products and services through AI (data collection and analysis by AI) would thus increase the marginal utility of consumption for a product while increasing the diversity of products available. Finally, AI could save consumers time and stimulate consumption: according to the technology research firm Gartner, several hundred million users save 2 hours a day thanks to AI.
• Externalities: several positive and negative externalities could emerge from a widespread adoption of AI. On the positive side, economic gains from international flows would accelerate: digital data accounts for a high proportion of international flows (information exchange, trade, knowledge...), and AI would facilitate the transmission of information. Gartner estimates that AI-based recommendations can contribute for up to 30-40% of future sales for major e-commerce players. AI could also increase wealth creation and reinvestment, with efficiency and productivity gains leading to higher worker compensation and business profits through higher overall growth. On the negative side, the integration of AI and the transition it implies for companies and governments (business models, refocusing of jobs) could generate negative effects, especially in the short term, such as higher production costs due to massive investments, job losses, relocation of some factories, etc., with nevertheless a positive impact in the longer term, such as increased productivity or the creation of new services.

What is the impact by region?

According to the PwC study, the impact of AI on the global economy will differ by region. The two biggest beneficiaries are expected to be China and the US, with a 26% and 14% increase in GDP respectively by 2030, accounting for 70% of the global economic impact. The reason for this is that North America has an advanced technological environment and superior consumer "readiness/knowledge" for AI that should enable rapid adoption of AI and its effect on productivity generally. For China, this would be due to a greater impact on GDP from improvements in productivity, products and services than in other regions around the world.

Estimates of AI-related GDP growth worldwide by 2030, through productivity and improved products/services