Artificial intelligence is game-changing technology. This doesn’t just apply to the workforce, but the economy too. Before we delve deeper into how AI can contribute to a better economy, let’s get the terms straight first. There’s capital, which is used to measure the value of production and man-made goods. Then there’s labor, which refers to the work that has been done by people, as well as the skills possessed by the workers.
The economy grows when labor or capital increases, as well as when they are used with improved efficiency. For example, inventions such as the typewriter, car, and steam engine were able to increase either labor or capital. In the same vein, artificial intelligence multiplies both labor and capital.
AI results in capital efficiency
The use of artificial intelligence and other intelligent systems help make capital more efficient by enabling them to improve production while reducing costs and the time involved. AI can also do work that is considered to be dangerous or monotonous, even if they work alongside humans. For example, using AI-based email systems such as Knowmail, humans can be spared the repetitive and highly time-consuming tasks involved with email. Leave it to artificial intelligence to make the workplace more efficient, thus resulting in more efficient capital.
AI is expected to increase economic growth by 1.7% in 16 industries
A report conducted by Accenture Research and Frontier Economy, entitled How AI Boosts Industry Profits and Innovation, revealed research stating the Information and Communication industry is set to benefit the most when it comes to AI-driven economic growth. When Artificial Intelligence is used in information and communication systems, this will translate to significant savings in time and cost as well as the costs involved in developing systems. The report also says that network, cloud, and systems security are areas that have the biggest potential for AI-driven growth.
AI can improve labor productivity by at least 40% by 2035
Another key takeaway from the report says that artificial intelligence could have an immediate effect on profit specifically by improving productivity and efficiency on the individual level. The report also says that the US economy as well as that of Finland are expected to benefit the most economically from AI by 2035, as they are expected to enjoy 2% higher GVA (Gross Value Added).
AI reduces human error
Virtually any kind of role that can be done by humans means that there is a risk for error. However, using AI and intelligent machines enables the tasks to be done more efficiently, at less cost, and with a significant reduction in human error. The current 24-hour economy works to ensure near-continuous production of capital can be maximized through the use of artificially intelligent machines, which leads to reduced waste while improving quality; also with the decrease of human error. For example, in factories, there is simply no point for business owners to keep pushing workers to work harder just to meet the demand since this can decrease the quality of output, when AI can take over a large part of the work with minimized error.
Artificial Intelligence helps create a transparent business landscape
Falsification of the auditing process is becoming an increasingly common problem especially in factories. Falsified audits refer to issues that are never resolved, which end up compromising ethical standards that are important to consumers. The primary reason behind this is fear of failure. But using AI can give automated data so that businesses can enjoy greater power to determine where the weak links lie, and where they fall short on worker welfare and quality standards. Through AI, businesses can rely on trust and full disclosure for improved efficiency, quality, and thus improved capital.
When businesses invest in artificial intelligence, it can open opportunities to improve every aspect of the business from top to bottom. By focusing on efficiency for labor and capital, AI also benefits the greater good and the economy as a whole. This is why AI has become necessary for forward-thinking organizations, or those who aspire to be, to ensure their survival in the modern world market.