AI will create $13 trillion in value by 2030

But get ready to change your occupation.

By Liam Tung | Sept 10, 2018

Consultant firm McKinsey reckons artificial intelligence (AI) will boost productivity way more than the steam engine was able to in the 1800s.

McKinsey’s latest forecast of AI’s impact on the global economy is that it will have generated $13 trillion in economic activity across the world by 2030, despite causing upheaval for many people.

The company expects AI will add about 1.2 percent of additional GDP growth per year through to 2030, which is much higher than the steam engine’s boost to human productivity of 0.3 percent per year between 1850 and 1910, and twice the impact IT had in the 2000s.

The company is expecting AI’s impact on growth to accelerate as the world approaches 2030 and that companies that move first on the technology will capture most of the benefits at the expense of companies that fail to adopt them.

But AI is also likely to cause a widening of inequality between developed and developing nations, with higher wages and shrinking working populations in wealthier nations providing impetus for its adoption.

“Leading countries could capture an additional 20 to 25 percent in net economic benefits compared with today, while developing countries may capture only about 5 to 15 percent,” McKinsey notes.

The company is predicting lower demand for repetitive jobs that require few digital skills and higher demand for non-repetitive jobs that demand high digital skills, which in turn will impact wages and could spur a new “war” for talent.

The biggest impact to GDP from AI will come via the automation of labor, which McKinsey estimates could be worth around $9 trillion or 11 percent higher output by 2030 compared to today.

Meanwhile, it expects AI could deliver about $6 trillion GDP by 2030 in the form of new products and services as AI spreads to new areas and applications, for example, a consumer market for genomics or an autonomous road system.

On the downside, the company predicts AI could reduce global gross GDP by nine percentage points or $7 trillion by 2030 through “negative externalities and transition costs”. This figure represents the impact of AI on people who’ve been displaced by technology.

The company estimates that 14 percent of the world’s workers will need to change occupations and move to new sectors or different geographies.