Artificial intelligence has taken a big leap lately, and is widely expected to change the world, in particular its economy. How much will that be? A Goldman Sachs study has an answer: an increase of 7% in world GDP.
With current global gross domestic product of slightly more than $100 trillion, that would mean a $7 trillion increase over the next 10 years, by the investment firm’s estimates. Along the way, labor productivity growth would expand 1.5% yearly, per the report by Goldman economists Joseph Briggs and Devesh Kodnani.
At issue is what’s known as “generative AI.” As the Goldman study explained, this refers to AI’s “ability to generate content that is indistinguishable from human-created output and to break down communication barriers between humans and machines.”
About two-thirds of the 900 U.S. occupations that the economists studied would be exposed to the AI-inspired automation, and of those, 25% to 50% of workers could end up replaced by machines. Among the areas most affected are enterprise software, health care and financial services, another Goldman report stated.
The generative software industry, now in its infancy, would explode, the Briggs- Kodnani paper said. It projected “the total addressable market for generative AI software to be $150 billion (it’s very little now), compared with $685 billion for the global software industry.”
The study was quick to note that many of the displaced workers could fit into the new jobs that automation spawns. “For example, information-technology innovations introduced new occupations such as webpage designers, software developers and digital marketing professionals,” it said.
Up ahead, the new AI could lead to “enhancing office productivity and sales efforts, to the design of buildings and manufactured parts, to improving patient diagnosis in healthcare settings, to detecting cyber fraud,” the study contended.
With big tech firms preparing their own generative AI tools, “the enterprise software industry appears to be embarking on the next wave of innovation, after the development of the internet, mobile and cloud computing transformed the ways we operate as a society,” the report declared.
For further reassurance, the report pointed to a 2020 by David Autor, a Massachusetts Institute of Technology economist, who found that 60% of current workers in occupations that didn’t exist in 1940.
Artificial intelligence could lead to similar upheaval.