AI: the $16 trillion wave that will mainly benefit China – PwC

  • Posted by admin on March 1, 2018

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By 2030, AI will have hit the global economy in a wave of opportunity and transformation, but also of distrust and severe social imbalance, said PwC at a policy forum in London. Chris Middleton listened in.

Global services giant PwC believes that artificial intelligence (AI) will give a $ 15.7 trillion boost to global GDP by 2030. However, the benefits won’t unfold evenly around the world: China will be by far the biggest beneficiary, with 26 percent added to its national GDP by 2030, according to the company.

The predictions were made onstage at the Westminster eForum Keynote Seminar, Artificial Intelligence and Robotics: Innovation, Funding and Policy Priorities, by PwC’s AI practice lead, Rob McArgow. The event took place in London this week and was attended by representatives of UK government, academia, and the business world.

North America will be the next biggest beneficiary, with a 14.5 percent GDP uptick, followed by gains of 10-12 percent by major economies in Europe. Emerging economies will benefit less, so there is a risk of “increased polarisation from the technology”, said McArgow.

The figures came from a study carried out earlier this year.

What about the UK?

So where does Great Britain stand in all this? The good news is that the UK is looking at a £232 billion GDP boost from AI by 2030: a 10 percent increase by current OECD statistics. However, the figures place the UK in the stragglers group and, more seriously, don’t factor in any negative effects of Brexit on the economy.

In October, one forecast suggested that the UK could lose up to 18 percent of its current GDP (or £400 billion) by 2030 in a hard Brexit with no trade deal. If those figures are correct, then the UK economy could shrink by eight percent even with the benefits of AI pouring in, while other economies are forging ahead. No economic study has suggested that UK GDP will gain from a hard Brexit.

But McArgow was undeterred by the ‘B’ word, following the current trend of stressing the need to improve productivity while ignoring the economic cliff. “The application of AI to our workforces, processes, systems, and businesses will provide a huge productivity boost, which as we all know government departments are wrestling with. [Productivity is] one of the big drags on the UK economy,” he continued.

“But in the second half of this phase, we believe that as AI is applied to our products and services, it will allow us to perfect and hyper-personalise them, and in turn, this will drive a significant boost in consumption.”

The two sides are productivity-driven growth and consumption-driven growth, which will lead to this large prize of a £232 billion addition to the economy by 2030.

Regional variations

The AI powerhouses of London, Oxford, and Cambridge, will do better than other parts of the economy, said McArgow.

His statement should be set alongside the recent warning by think tank Future Advocacy that AI and automation will have a severe impact on employment in those parts of the country that have already been hit by a decline in industrial jobs, such as the Midlands and parts of the North of England.

By the early 2030s, we could see up to 30 percent of existing UK jobs becoming highly susceptible to automation, due to technologies such as AI. In real terms, that’s 10 million workers out of our existing workforce.

But this was a familiar message from a dozen or more apocalyptic reports, many of which have ignored AI’s potential to create new types of work and new technology startups. The internet was once credited with a similar ability to decimate employment opportunities. Yet while it is true that many traditional retailers have gone to the wall – including two this week in the UK – unemployment isn’t soaring and new types of business have taken their place.

To his credit, however, McArgow admitted that PwC was mindful of the fact that these headline-grabbing figures fail to give policymakers any granularity, or help business owners to make strategic decisions about workforces, acquisitions, education, or skills.

Read more: Top priest shares ‘The Ten Commandments of A.I.’ for ethical computing

So where are we today really?

The first wave of AI: women worst affected

To fill in the blanks for policymakers, PwC put together another new report two weeks ago. This looked at 29 countries and 200,000 specific jobs in order to explore in much greater detail how AI will transform societies and economies, said McArgow.

“It’s clear from this that there are going to be three distinct waves over the next 12-15 years, of ever-increasing scope and scale,” he explained. “The first wave doesn’t have a dramatic impact, but it does see sectors such as financial services becoming more affected.”

Or at least, no dramatic effect for 50 percent of the population: men. McArgow added:

From a gender perspective, we see in the short term females being more adversely affected and more at risk of having their jobs automated than men.

But this will be a temporary effect, he suggested: “As these waves unfold, as we move on from the assistance of AI in our lives to much more of an augmentation phase and then full autonomy, AI will start to have a dramatic impact in areas such as transportation, and on jobs in that sector. At that point, the gender balance flips and we will see men being more adversely affected than women and more at risk.”

Education and skills will be critical in deciding whether people can find new opportunities in the AI-enhanced economy, said McArgow. “People with higher education levels are far less susceptible to automation than those with lower levels, so clearly there are some big questions that policymakers and business leaders need to wrestle with.”

Read more: Women in AI & IoT: Why it’s vital to Re•Work the gender balance

Cosmopolitan bubbles

Despite these notes of caution, there is an enormous opportunity for the UK to use AI to drive business growth and start solving “really important problems”, said McArgow. “However, when I get outside the cosmopolitan elite bubble that I live in in London and get out there into the regions, I see that a significant proportion of our businesses haven’t even started on this journey yet.

“There are a number of reasons for that. First, there is deep distrust in this technology, often thanks to media tales of dystopia and armageddon, or marketing-fuelled hype. AI isn’t magic, it’s software that is a bit cleverer than before, but it will scale quickly.

“But we have to be able to find a safe, secure, transparent way of unlocking the value in these data sets – a way that the public trusts – to enable us to drive innovation and growth.”

Read more: Prevent malicious use of AI, say Oxford, Cambridge, Yale

Internet of Business says

Wise words. Towards the end of his speech, McArgow observed that there is an “arms race” to stockpile AI technologies around the world and that many countries are approaching the future with a clear vision for the role they can play in it. He shared the example of Dubai and the UAE, where a Minister for AI has been appointed, and touched on the ambition of China, which is automating faster than any other nation on earth.

Japan, too, is investing £161 billion dollars in building a super-smart society: figures that dwarf central investment by the UK, for example.

So one thing is becoming abundantly clear about the UK, especially when it is compared to countries such as China, South Korea, Japan, the US, France, and Germany. Report after report has come to the same basic conclusions: the UK is lagging behind its major competitors and isn’t investing enough, despite the enormous economic opportunity.

More, the UK must ensure that AI, automation, and robotics don’t just benefit the “cosmopolitan elite” described by McArgow by focusing on the few, rather than the many, or by piling up yet more economic gains in London and the South East.

But to achieve these things demands vision, clarity, and strong leadership from the front. And this is where the UK is signally lacking. At the same time, Brexit is undermining any chance of meaningful partnership with our allies, and may yet drive a coach and horses through the prospect of sustained economic growth. That the coach and horses will be driven by 19th Century thinkers and ideological zealots is inevitable.

Despite the UK’s world-class AI expertise and the excellent work being done by many in the sector (see below), responsibility for UK AI policy is now spread across far too many different organisations. Not to mention a government department that already has too much on its plate: the Department for Culture, Media and (as the BBC2 satire W1A brilliantly put it) “for some reason also Sport”.

Perhaps Whitehall could do with a dose of AI to figure out a better approach, before it is too late.

• On the subject of the first wave of AI hitting women’s employment more than men’s, research published today by advocacy group Manyminds reveals that only 27 percent of FTSE 100 board members are women. And at current global rates, pay parity worldwide is 200 years in the future.

Read more: South Korea most automated nation on earth, says report. The UK? Going nowhere

• The eForum debate also included contributions from: Lord Clement-Jones, chairman of the House of Lords Select Committee on Artificial Intelligence; Prof Dame Wendy Hall, joint lead of the government’s AI review; Prof Philip Nelson, chief executive of EPSRC; Rob McCargow, AI programme lead at PwC; Gila Sacks, director of digital and tech policy at the Department of Culture, Media, and Sport; and Sue Daley, techUK’s head of cloud, data, analytics, and AI.

Further reports from the event will be published on Internet of Business.

The post AI: the $ 16 trillion wave that will mainly benefit China – PwC appeared first on Internet of Business.

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