AI’s real impact on the global economy

Numerous articles have reported that artificial intelligence will take jobs, boost productivity, and usher in the global economy’s Fourth Industrial Revolution.

However, only a few have explored the major sectors that will have major transformations due to artificial intelligence.

READ: US unveils world’s first underground robot delivery service

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This article will list the eight sectors that will likely adjust significantly due to AI. Later, it will explain how you might see this transformation in your life.

The eight most impacted sectors

PricewaterhouseCoopers International Limited (PwC) released its latest study on AI’s impact on the global economy. 

It created the AI impact index to measure how artificial intelligence will transform each of its sectors. 

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The index scored these sectors from 1-5, with 1 being the lowest and 5 the highest. Here are the top eight with their respective ratings: 

1. Healthcare: 3.8
2. Automotive: 3.9
3. Transport and logistics: 3.5
4. Energy: 3.2
5. Financial services: 2.8
6. Retail and consumer: 2.8
7. Technology, communications, and entertainment: 2.5
8. Manufacturing: 2.0

1. Healthcare

PwC says AI-powered diagnostics will become common in hospitals worldwide. Physicians would likely use artificial intelligence systems as digital assistants. 

The technology would facilitate diagnoses and collect data so that it could provide better results. Later, the advancements might let humans delegate these tasks entirely to AI systems. 

Nowadays, this outlook is turning into reality as more researchers explore AI’s healthcare applications. 

For example, Korean researchers have developed an AI system that detects childhood autism with 100% accuracy.

Such innovations are coming to the Philippines, thanks to a collaboration between Senti AI and Techne Systems. Learn more about it here.

2. Automotive

Artificial intelligence will make self-driving cars more advanced until humans can let it take over the steering wheel. 

PwC says people may see it as an alternative to owning a car. Nowadays, it’s becoming more expensive due to rising maintenance and insurance costs. 

The United States has been deploying autonomous vehicles for ride-hailing services, such as Waymo.

Tesla CEO Elon Musk even promised his upcoming robotaxis will let their owners earn passive income. 

He claimed they’ll ferry passengers while their owners are busy so that they can earn money.

However, artificial intelligence needs further improvement before self-driving cars become a major part of the global economy.

3. Financial services

More apps are deploying AI investment and financial advisors to deliver more personalized recommendations. 

For example, Google says AI can study customer journeys, peer interactions, and financial goals to suggest financial products and services. 

Many apps have been providing such services, but they’ve become more convenient due to Large language models (LLMs).

These AI models allow these mobile programs to understand natural language, letting users describe their needs as if speaking with a real person. 

They can also analyze documents to help financial institutions find investment opportunities and offer more suitable loans to clients. 

Nonetheless, more consumer trust and stronger regulations are necessary to integrate AI into the financial sector safely and effectively.

4. Retail and consumer

AI-powered recommendations are also present in online shopping apps. 

Nowadays, artificial intelligence allows these programs to push products and services that likely meet shoppers’ demands.

As a result, the platforms earn more and consumers receive better customer service. 

These technologies may also guide online businesses to improve their offerings after analyzing consumer trends.

Businesses can create AI-generated mockups to test products and services before pushing them to market. Consequently, it could reduce waste from product development.

For example, this Inquirer Tech article reported a Filipino student who created stunning AI-generated dresses based on local myths.

US-based online shopping cloud platform SellersCommerce says over 33% of the world’s population shops online. 

As a result, AI’s impact on eCommerce will inevitably affect the global economy.

5. Technology, communications, and entertainment

Artificial intelligence is making it easier to recommend the most suitable content to viewers. 

This strategy is now common in online platforms like YouTube and TikTok. Moreover, AI helps these platforms organize content and monitor revenue generation.

This benefit trickles down to content creators, who use AI-assisted insights to provide more content that appeals to their audiences. 

South Korea takes this to the next level by creating online performers with artificial intelligence.

This article explains how tech company Pulse9 created the first-ever AI-generated K-pop group, Eternity.

6. Manufacturing

PwC says AI will allow factories to have self-learning monitoring. AI systems could adapt to production changes, letting owners predict and control their outputs. 

Consequently, artificial intelligence could reduce costly delays, defects, or deviations from product specifications. 

The AI boom has also caused countries to develop proprietary AI systems, which the tech giant Nvidia calls “sovereign AI.” 

Nvidia defines it as “a nation’s capabilities to produce artificial intelligence using its own infrastructure, data, workforce, and business networks.”

Learn more about this AI race here.

7. Energy

PricewaterhouseCoopers says AI enables smart meters to tailor a person’s energy consumption and reduce costs.

Artificial intelligence learns from users over time, letting it manage supply and costs more efficiently. 

Also, the AI boom is sparking significant financial support from artificial intelligence firms. 

Developing, operating, and maintaining AI models require massive amounts of energy. Consequently, companies are investing in various sources that could meet this demand. 

For example, Google signed an agreement with Kairos Power. It will develop small nuclear reactors and then Google will purchase their energy output. 

Learn more about this collaboration here.

8. Transport and logistics

PwC says autonomous trucking could reduce transportation costs for companies, reducing costs and increasing asset utilization. 

AI-assisted trucking could also disrupt transportation and logistics as new companies may offer such services.

Moreover, large online retailers may spread AI T&L into their branches, fueling demand for these smaller providers. 

The MIT Sloan School of Management says artificial intelligence could learn from logistics data to better monitor and adjust supply chains. 

In turn, companies could become more resilient to sudden supply disruptions, consistently delivering goods regardless of such changes.

A closer look into AI’s impact on the global economy

The overwhelming hype for AI’s transformative effects can be overwhelming as multiple sources report on them 24/7.

Fortunately, Nobel-winning economist Daron Acemoglu offered a more clear-minded take on the ongoing trend. 

In an interview with MIT News, he cited a paper from Economic Policy called “The Simple Macroeconomics of AI.” 

It says AI will produce a “modest increase” in GDP between 1.1% to 1.6% over the next decade. Also, it will produce a 0.05% annual productivity growth.

“I don’t think we should belittle 0.5 percent in 10 years. That’s better than zero,” Acemoglu says.

“But it’s just disappointing relative to the promises that people in the industry and tech journalism are making.” 

He admitted that AI could take jobs. “It’s going to impact a bunch of office jobs that are about data summary, visual matching, pattern recognition, etc.,” Acemoglu adds.

Yet, “we’re still going to have journalists, financial analysts, and HR employees.” 

The MIT professor also compared AI’s ongoing effects to historical tech innovations, such as factory automation.

Ironically, people are more likely to adapt to artificial intelligence slower as it develops faster. 

Acemoglu argues that this technology should improve at a “more measured tempo” so that people can catch up. 

Nevertheless, the global economy’s AI adoption “will naturally slow down” as the “hype” diminishes. 

Moreover, he says “government regulation has that role.” However, he did not specify any long-term guidelines that the global economy might implement.

Lastly, Acemoglu explains that the world must have a clear vision of its objectives for AI development. 

A proper roadmap will help everyone steer innovation into a future that benefits all.