Underutilized and Unprepared: Are We Ready for the Next Phase of AI?
Are we ready? Sometimes it is a simple question. Leaving the house, heading to a restaurant, packing for the holidays. At other times it is nothing short of monumental. This is where the point falls when we ask whether we are ready for the next evolution of AI.
People viewing an artificial intelligence (AI) exhibit titled “Sex, Desire and Data” , [+]
A McKinsey report into generative AI claims that AI-powered automation is expected to increase global productivity by just 0.2–3.3% from 2023 to 2040. This begs the question; Are we underestimating the potential of AI? In my mind, yes we are.
Addressed by Roopa Purushottam (C), Chief Economist and Head of Policy Advocacy, Tata Sons , [+]
what recent history tells us
From 2021 to 2023, we see an astonishing exponential growth in AI capabilities. Companies such as Anthropic and Fog saw unicorn valuations, indicating growing interest and investment in the sector. Can we really attribute these advances to such conservative productivity projections for the next two decades? It sounds silly and borders on being dangerous.
According to Presidency Research, global industrial automation was projected to be worth $195 billion in 2022 and is projected to exceed $459.51 billion by 2032. At that rate of growth, we should plan for large increases in global AI development, potentially large job displacements, and more. Critical needs of large scale re-skilling initiative.
Photo illustration by McKinsey & Cohere, Suqian, Jiangsu Province, China, July 19, 2023. (Photo) , [+]
a glimpse of the future
Many of us are already caught in the AI trap, albeit unknowingly. From our Netflix recommendations to LinkedIn’s feed, algorithms shape a huge part of our digital experiences. Extrapolate this trend, and it’s easy to imagine a near future where AI not only recommends, but also builds. Imagine pervasive AI-generated environments for work, education, entertainment and more that are tailored to our individual preferences, perhaps even outpacing the appeal of the real world. This is not mere science fiction; This is a plausible trajectory given our current technological speed.
what happens next
It’s not just about better movie recommendations or a more efficient workflow. The AI revolution has the potential to reshape the fabric of our society. If AI begins to dominate our experiences, our relationships and social structures, we could see change unlike any in the last 200 years. What if this happens? This is not to sound a warning, but to emphasize that change of this magnitude requires careful foresight and planning.
While a 0.2-3.3% increase in global productivity due to AI may sound impressive on the surface, it is necessary to zoom out and appreciate the wider picture. We are potentially on the verge of an AI revolution that could redefine life.
real challenge? Making sure we’re ready for the ride.
- Rapid AI Progress: The progress made in AI capabilities from 2021 to 2023 is considered to be extraordinary. It shows no signs of slowing down. According to IBM and the Techjury AI blog, an astonishing 77% of businesses are using or exploring AI.
- Investment and Valuation: A PwC study states that AI could contribute up to $15.7 trillion to the global economy by 2030, and increase GDP by 26% for local economies over the same time frame.
- Underestimated Effects: The estimated 0.2-3.3% increase in productivity due to automation and AI appears to be a serious shortfall given the potential of the technology. McKinsey also estimates that 15 percent of the global workforce (about 400 million people) could be displaced by automation by 2030.
- The World Economic Forum estimates that AI will replace 85 million jobs worldwide by 2025, but it will also create 97 million new jobs. Yes, that’s a new gain of 12 million jobs, but are we creating the workforce to fill those roles?
unprepared world
There is a perception that the global community is largely unprepared for the magnitude of change that AI can bring. Companies ranging from startups to corporates are incorporating generative AI into their core functions. AI is growing in importance in boardroom discussions, investment decisions and C-suite operations. McKinsey’s report on Generative AI shows that there is no sector of the industry that this technology will not affect. Productivity in sales and marketing will increase, IT solutions will be delivered faster, R&D time will be reduced, and decisions will be made faster and with a higher rate of success.
The companies that will win over the next decade are the ones that embrace generative AI with enthusiasm and an open mind to its potential. Technology cannot be ignored. You should see it as a partner in progress and development. It can help you, your staff and the entire company move towards a better and more secure future. Now is the time. The opportunity is yours, if you decide to take it.