How AI could exacerbate the economic divide between countries, companies, and workers
Artificial intelligence (AI) is a powerful technology that has the potential to transform the world economy. However, it also poses significant challenges and risks, especially for those who are lagging behind in its adoption and absorption. According to a recent report by McKinsey Global Institute, AI could widen the gaps between countries, companies, and workers in terms of economic performance, competitiveness, and income distribution.
AI could create winners and losers among countries
The report estimates that AI could add up to $13 trillion to global GDP by 2030, but this value is not evenly distributed. Some countries are more prepared and capable of capturing the benefits of AI than others, depending on their level of digital readiness, innovation capacity, human capital, and supportive policies. The report identifies 18 \"AI leaders\" that account for more than 70 percent of global AI investment and 60 percent of global AI adoption. These are mostly developed economies, such as the United States, China, Japan, Germany, France, and the United Kingdom. On the other hand, there are 132 \"AI followers\" that have lower levels of AI investment and adoption. These include many emerging economies, such as India, Brazil, Indonesia, Mexico, and South Africa.
The report warns that AI could exacerbate the existing economic disparities between these two groups of countries. The AI leaders could capture an additional 20 to 25 percent in economic benefits compared with today, while the AI followers could lose up to 5 percent. This could widen the gap in GDP per capita by up to 40 percent by 2030. Moreover, AI could also affect the trade patterns and competitiveness of different countries. The report projects that AI could increase global trade by 6 percent by 2030, but this would mainly benefit the AI leaders that have strong comparative advantages in high-tech sectors. The AI followers could face increased competition and pressure to upgrade their industries and skills.
AI could create winners and losers among companies
The report also finds that AI could create significant differences in performance among companies within the same sector and country. The report identifies two types of companies: \"AI front-runners\" and \"AI followers\". The former are those that adopt and absorb AI technologies across their entire organization, while the latter are those that use AI only in some functions or not at all. The report estimates that by 2030, the AI front-runners could capture an additional 122 percent in cumulative cash flow compared with today, while the AI followers could lose up to 23 percent. This could result in a widening gap in market share and profitability between the two groups of companies.
The report suggests that there are several factors that enable some companies to become AI front-runners. These include having a clear vision and strategy for AI; investing in data infrastructure and talent; fostering a culture of innovation and experimentation; scaling up successful AI applications; and ensuring ethical and responsible use of AI. The report also highlights some of the challenges and barriers that prevent some companies from adopting and absorbing AI effectively. These include lack of data quality and availability; lack of skilled talent; lack of trust and understanding of AI; regulatory uncertainty; and organizational inertia.
AI could create winners and losers among workers
The report also analyzes how AI could affect the demand for different types of skills and occupations in the labor market. The report estimates that by 2030, AI could create up to 58 million net new jobs globally, but this would require significant shifts in skills and occupations. The report projects that AI could reduce the demand for physical and manual skills by 11 percent and basic cognitive skills by 15 percent. On the other hand, AI could increase the demand for higher cognitive skills by 8 percent; social and emotional skills by 24 percent; technological skills by 55 percent; and cross-functional skills by 14 percent.
The report warns that these shifts in skills demand could create significant challenges for workers who need to adapt to new tasks and roles. The report estimates that by 2030, up to 375 million workers globally (14 percent of the global workforce) may need to change occupations or acquire new skills due to AI. The report also notes that AI could have different impacts on different groups of workers depending on their age, aa16f39245