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According to a new report by PwC, Artificial Intelligence will contribute as much as $15.7 trillion to the world economy by 2030. That's more than the current combined output of China and India. Global GDP, which stood at about $74 trillion in 2015, will be 14 percent higher in 2030 as a result of AI, according to PwC's projections. But where will that much value come from? The answer is varied but much of it will come from, firstly, increased productivity as businesses automate processes and augment their labor forces with new AI technology, secondly, consumption as consumers snap up personalized and higher-quality goods, and thirdly, by propelling new innovations.
Artificial intelligence (AI) refers to simulated intelligence in machines. These machines are programmed to "think" like a human and mimic the way a person acts. The ideal characteristic of artificial intelligence is its ability to rationalize and take actions that have the best chance of achieving a specific goal, although the term can be applied to any machine that exhibits traits associated with a human mind, such as learning and solving problems.
So where do the 16 trillion dollars emanate from? First of all, corporate profits have been in decline. In the United States, after reaching their highest share of national income in the post-war era, the growth of profits dropped from 25 percent in 2010 to -3 percent in 2015. This phenomenon is evident across most industries, from Manufacturing to Utilities to Financial Services, according to another report by Accenture. Fortunately, a new factor of production Artificial intelligence (AI) has emerged that can help kick-start profitability. The Accenture research shows that AI has the potential to boost rates of profitability by an average of 38 percent by 2035 and lead to an economic boost of US$14 trillion across 16 industries in 12 economies by 2035. These 12 developed economies contribute to about 50% of the world's GDP. But this will only happen if organizations adopt a people-first mindset and take bold and responsible steps to apply AI technologies to their business.
By 2035, AI will boost profit to as much as 14 trillion dollars in 12 developed economies alone. These are the 16 Industries poised to make significant gains from Artificial Intelligence. Accenture used
growth in gross value added (GVA) as its yardstick, GVA is a close approximation of GDP. GVA is an output measure that accounts for the value of goods and services produced in a certain sector. It can also be thought of as the contribution of different sectors to economic growth. Let's see how much value AI can add to these industries in the coming years.
1. Information & Communication: In the Information and Communication industry, with its heavy reliance on technologies, AI capabilities can coalesce with existing systems to generate US$4.7 trillion in gross value added in 2035 or 1 trillion dollars in additional profit.
2. Manufacturing: For Manufacturing, AI can boost value by almost US$4 trillion in 2035, an increase of almost 45 percent
compared with business-as-usual. Precursors like the Internet of Things (IoT) create favorable conditions for the seamless integration of intelligent systems. Today's Internet of Things technologies enable physical devices such as assembly lines to connect and communicate with digital systems. In addition, AI can bridge the gap between current forms of automation and learning with more advanced forms.
3. Financial Services: Financial Services can capitalize on AI technologies to relieve knowledge workers from mundane, repetitive tasks such as general customer queries, mortgage reviews, and market research. Overall, this sector will benefit from US$1.2 trillion in additional value in 2035.
4. Wholesale & Retail: We all have seen what Amazon has accomplished in just 20 years, but they are still scratching the surface in what can be done. AI can yield about US$2.2 trillion in additional value by 2035 for the Wholesale and Retail sector, an increase of 36 percent compared with the business-as-usual case. Retailers can draw on AI's intelligent automation capabilities to streamline inventory and warehouse management, while augmented reality technologies can enable immersive shopping experiences with customers.
5. Transportation & Storage: This first autonomous truck delivery was a wake-up call for an industry that employs 3.5 million truck drivers in the U.S. alone. Artificial Intelligence (AI) could potentially lead to the full automation of truck fleets. But it won't end there, we will also see the automation of ships, trains, airplanes, and rockets. On storage, grid operators, for example, will be able to use AI techniques to model the behavior of individual devices and battery storage units by reviewing data from smart meters and sensors making it possible to estimate the useful lifetime of a battery pack or unit. It is projected to add about 800 billion dollars in value to the sector.
6. Professional Services: For Professional Services, Artificial intelligence can boost value by almost US$1.8 trillion. AI technologies such as IBM Watson are a paradigm shift for professional services. Last year, BakerHostetler, a large U.S. law firm employed ROSS, an artificial intelligence computer powered by IBM's Watson technology. It works within the firm's bankruptcy law practice, has learned the entire bankruptcy code and can discuss it in human terms. It knows about specific activities and case law in every jurisdiction across the country. Using AI is enabling companies to shrink the timeline involved in tasks, takes the human interaction out of it, increases accuracy, and after the initial investment, costs practically nothing. Humans are now able to have real conversations with computers about their clients.
7. Healthcare: AI will accelerate growth in the Healthcare industry from 2.2 percent to 3.4 percent by 2035, generating US$461 billion of additional value. The intelligent automation channel accounts for more than 60 percent of the benefits. AI-powered systems can analyze massive amounts of unstructured data and produce predictive diagnoses that can detect issues before they become a serious health risk. For example computer vision can be used to detect skin cancer long before it does much damage hence early treatment. The innovation channel can also add more than US$100 billion to the industry in 2035. Another example of AI's enormous potential in Healthcare: The industry has collaborated with previously unrelated fields, such as manufacturing and design, to create cutting-edge 3D printing techniques for organ transplants.
8. Construction: When it comes to the construction industry, AI has the potential to help reimagine how processes are done such as BIM (building information modeling). AI can identify true collisions versus false ones in BIM. Another use case is in new building design, AI can identify missing elements like waterproofing for specs for stadiums. It is projected to add 500 billion dollars in value by 2035.
9. Agriculture, Forestry & Fishing: Data generated by sensors or agricultural drones collected at farms, on the field or during transportation offer a wealth of information about soil, seeds, livestock, crops, costs, farm equipment or the use of water and fertilizer. Artificial Intelligence can help farmers analyze real time data like weather, temperature, moisture, prices or GPS signals and provide insights on how to optimize and increase yield, improve farm planning, make smarter decisions about the level of resources needed, when and where to distribute them in order to prevent waste. This could add more than 200 billion dollars in additional profit by 2035.
10. Accommodation & Food Services: Until now, the picture of robots serving food or ironing clothes or delivering bath towels was seen only in sci-fi movies or cartoons. Artificial Intelligence is making this a reality with the progress made in Robotics and Natural Language Understanding. Applying AI in the Hospitality Industry can deliver higher levels of satisfaction to guests. It will not only save time but also money over the long run. Labor accounts for more than 50% of operational costs in the hospitality sector. The need for efficient labor controls is essential to control costs and maintain consistent service quality. AI can also help hoteliers to create a constantly growing and learning centralized guest profile thereby creating a personalized service to the guest. Overall, it can add more than 500 billion dollars to the industry by 2035.
11. Utilities: In combination with other emerging technologies such as distributed energy resources and distributed ledgers (blockchain), AI has the potential to deliver the active management that will be required for the grid of the future. Powerful intelligence will be able to balance grids, manage demand, negotiate actions, enable self-healing and facilitate a host of new products and services. AI will also enable more efficient and effective utility operations by helping to analyze unstructured data which typically makes up to 80% of data in an organization. For example, GE uses AI to enhance wind turbine efficiency in Japan, raising power output by around 5% and lowering maintenance costs by 20%. It is projected to add around 300 billion dollars in value to the sector by 2035.
12. Arts, Entertainment & Recreation: What better way to create a movie trailer about an artificially enhanced human than to use the reality behind the premise; artificial intelligence (AI). IBM Research and 20th Century Fox recently signed a partnership to use AI techniques to produce what they described as the "first ever cognitive movie trailer". The process of creating a trailer for the new horror movie Morgan involved using AI techniques and experimental APIs through IBM's Watson platform. Watson was taken to film school as it analyzed hundreds of existing horror movie trailers to learn what kept viewers on edge before being fed the entire final cut of the upcoming movie. The analysis resulted in the program selecting the 10 most usable moments in the film and then a human editor created this finished trailer from those clips. Creative application of AI can add more than 9 billion dollars in value in this industry by 2035.
13. Social Services: Social Services will see an increase in productivity from 1.6 percent to 2.8 percent, yielding a substantial increase in economic output of more than US$216 billion in value.
14. Public Services: Artificial intelligence already helps run the government, with cognitive applications doing everything from reducing backlogs and cutting costs to handling tasks we canít easily do on our own, such as predicting fraudulent transactions and identifying criminal suspects via facial recognition. In addition, AI-based applications can help governments boost revenues, overcome resource constraints, free workers from mundane and routine tasks, improve the accuracy of projections, inject intelligence into scores of processes and systems, and handle many other tasks we humans can't easily do on our own, such as sifting through millions of documents in real time for the most relevant content. It is projected to add 900 billion dollars or more in Public Services by 2035.
15. Education: Education, where productivity growth is notoriously slow, will see an increase from 0.9 percent to 1.6 percent by 2035 and boost the sector by 109 billion dollars.
16. Other Services: In addition to improving efficiency and boosting profits, Artificial Intelligence will also propel new innovations. This will create new industries and markets we don't know of today. This could add additional 100 billion dollars to the world's GDP.
In summary, a whopping 14 trillion dollars will be created in value in 16 industries. And the report just covers 12 economies or 50% of the world's GDP, in other words, if applied globally that will be 28 trillion dollars by 2035. So the 16 trillion dollars figure by PwC seems plausible. Although these figures were drawn from Accenture research they will amount to nothing if companies or countries don't deploy AI technologies in their business strategy.
Ugonna Alinnor is a Data Scientist and Machine Learning Expert. He is the founder of Cartwheel Technologies an Artificial Intelligence company based in Lagos, Nigeria.