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From HAL 9000 to R2-D2, artificial intelligence (AI) has long captivated our imaginations. Now, the convergence of a set of technologies is bringing AI out of our minds and into the marketplace. This convergence promises nothing less than the chance to escape the traditional limits of capital and labor.
In this blog series, I’ll look at why AI is poised to transform how businesses operate and make decisions, and what that will mean for the global economy. I’ll also go over what financial services leaders should do to prepare for a future with artificial intelligence.
AI’s advent comes at a fortuitous time. Four key economic indicators paint a gloomy picture of economic growth in the world’s developed economies. Since the 1980s, rates of GDP growth in many large economies have steadily slowed, while total factor productivity (a key measure of how well an economy uses existing capital and labor) has been steadily weakening, especially over the last 10 years. Marginal capital efficiency has steadily dropped over the last 50 years, while the populations of the world’s richest economies continue to age and birth rates decline.
That these metrics would so decline during a period of capital investment and population growth paints a gloomy picture about the future of growth. If not cause for outright pessimism, these data suggest that the efficacy of investments in capital and labor is wearing off. These two traditional drivers of economic growth appear to be running out of steam.
It is worth noting that the term “AI” is not actually all that new. Its history stretches back at least 70 years to the careers of computer science pioneers like Alan Turing, Marvin Minsky, and John McCarthy.
What is new is the power of the technologies encompassed by the term. In areas like computer vision, audio processing, natural language processing, knowledge representation, and machine learning, computer systems have shown remarkable growth in the last decade. AI today can sense, comprehend, and act like never before.
Coupled with explosive growth in big data and the plummeting costs of processing power, these changes mean that AI’s role in our daily lives—and in the global economy—is set to dramatically expand.
Modeling done by Accenture with help from Frontier Economics has found that AI could double rates of economic growth in 12 developed economies by 2035. In other words, AI is becoming a new factor of production.
Contrary to widespread fears about robots replacing humans in the workplace, AI’s greatest impact will be as an aide to humans.
Consider a financial institution that needs to make complex, nuanced decisions in a short time frame based on large amounts of data. AI’s data visualization, machine learning, and automation solutions can help the humans in this scenario sift through amounts of data that would otherwise be overwhelming. AI will help humans here make better decisions, faster.
Or consider a call center at a bank, which must make large volumes of decisions based on simple data sets. Here, AI can automate simple, mundane tasks, freeing workers up for the decisions that demand a real human touch. In this way AI will boost production and drive real economic growth.
These examples just scratch the surface. As a new factor of production, AI can drive growth in at least three important ways. Come back next week for a look at the first of these: intelligent automation. In the meantime, head here for more Accenture insight on the looming impact of AI.