Much of the talk about generative artificial intelligence over the past year or so has been focused on either the potential impact it will have on workers or the technology’s flaws, specifically the hallucinations that can result in it gaslighting users or outright insulting them.
But a new report from McKinsey is looking past that to determine what generative AI could mean to the world’s economy—and the potential is vast. The analysis found that AI could add the equivalent of $2.6 trillion to $4.4 trillion annually to the global economy by 2040. To put that into perspective: The United Kingdom’s entire GDP in 2021 was $3.1 trillion
In addition, it could enable labor productivity growth of 0.1 to 0.6% annually in that same time.
“Generative AI will have a significant impact across all industry sectors. Banking, high tech and life sciences are among the industries that could see the biggest impact as a percentage of their revenues from generative AI,” the report reads.
In the banking industry alone, the technology could deliver between $200 billion and $340 billion in value each year. The retail and consumer packaged goods industries could see an impact of $400 billion to $660 billion annually.
Most of the value generative AI can contribute falls into one of four buckets—customer operations, marketing and sales, software engineering and R&D—the study found. Researchers examined 63 different use cases, from interacting with customers to creating content and code.
By automating some of the individual duties of workers, McKinsey says, generative AI will augment what workers can do. As much as 70% of the activities that dominate a worker’s day have the potential to be automated, letting humans focus on more important matters. But that will also require assistance from employers.
“Generative AI can substantially increase labor productivity across the economy, but that will require investments to support workers as they shift work activities or change jobs,” the report reads. “Combining generative AI with all other technologies, work automation could add 0.2 to 3.3 percentage points annually to productivity growth. However, workers will need support in learning new skills, and some will change occupations. If worker transitions and other risks can be managed, generative AI could contribute substantively to economic growth and support a more sustainable, inclusive world.”
Not every outlook is quite as optimistic as McKinsey’s. An April report from Goldman Sachs forecast “significant disruption” for the labor market due to AI, noting that as many as 300 million jobs could be affected—and that among exposed occupations, as much as 50% of the workforce could be replaced ultimately.
Office jobs had the biggest percentage of positions that could be taken over by the technology. Administrative support roles, for example, saw a big risk with 46% of their tasks capable of being automated. Some 44% of legal work tasks were vulnerable and architects and engineers could see up to 37% of their tasks exposed.
And even the McKinsey report acknowledges the potential downsides of AI, even as it focuses on its economy boosting potential.
“These tools have the potential to create enormous value for the global economy at a time when it is pondering the huge costs of adapting and mitigating climate change,” says the report. “At the same time, they also have the potential to be more destabilizing than previous generations of artificial intelligence. They are capable of that most human of abilities, language, which is a fundamental requirement of most work activities linked to expertise and knowledge as well as a skill that can be used to hurt feelings, create misunderstandings, obscure truth, and incite violence and even wars.”
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