Generative AI could allow for trillions of dollars worth of productivity gains
Generative AI can add between $2.6 trillion and $4.4 trillion worth of annual productivity globally, according to McKinsey’s new report.
The report, titled ‘The economic potential of generative AI: The next productivity frontier’, analysed 63 use cases across 16 business functions that “have the ability to deliver the predicted returns,” – returns which are comparable to the UK 2021 GDP of $3.1tn.
The consulting firm estimates that overall, artificial intelligence use cases, even without generative AI, could deliver $11tn to $17.7tn in value annually to the global economy.
Adding generative AI to the equation could increase that amount by 15% to 40%.
Generative AI covers algorithms such as ChatGPT that are capable of generating content such as text, images, audio, or videos in response to prompts given by the user.
Allowing employees to use generative AI within their workload could increase productivity by 0.1% to 0.6% every year to 2043, the study finds, even beyond the 63 use cases.
On top of that, generative AI’s current capabilities, alongside other technologies, has the potential to automate work activities enough to absorb 60 to 70% of employee’s time today.
The report predicts that half of today’s work activities could be automated between 2030 and 2060, with the midpoint of 2045 expected to arrive a decade earlier than McKinsey’s previous estimates.
“Generative AI has put the pace of workplace transformation on speed dial. Jobs are being re-imagined and industries transformed in a matter of months rather than years. It gives humans a new superpower, and our economy a much-needed productivity injection,” comments Lareina Yee, senior partner and chair of McKinsey Technology Council.
McKinsey estimates that about 75% of total value potential of applying generative AI will be found in four business functions: customer operations, marketing and sales, software engineering, and R&D.
Customer operations use cases include improving self-service through automated channels, and giving human customer care agents more targeted information to increase sales, expecting to enhance productivity in the sector by around 30 to 45%.
Marketing is expected to benefit from faster content ideation and drafting, enhanced quality data insights, search personalisation and lead prioritisation, increasing productivity of up to 15%.
Software engineers will spend less time coding, correcting code, and performing market research, and R&D will be able to use generative AI to improve overall product quality and optimising designs for manufacturing.
“These powerful tools hold immense potential for the global economy, especially in the face of demographic challenges. But generative AI language capabilities also pose risks, capable of both enhancing human interactions and causing harm through misunderstandings, manipulation, and conflict,” says McKinsey Global Institute partner Michael Chui.
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