McKinsey Report Forecasts Trillions in Global Economic Growth Driven by Generative AI

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What’s going on:      

Global consulting firm McKinsey and Company released a new report estimating that generative AI could add around $2.6-$4.4 trillion annually to the global economy. 

In its analysis, the report examined 850 occupations and 2,100 detailed work activities in 47 countries, encompassing more than 80% of the global workforce, according to Venture Beat.  

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The findings reveal that generative AI’s value-added contribution to the economy will primarily stem from four areas: customer operations, marketing and sales, software engineering, and research and development (R&D). The report states that these four areas are projected to account for 75% of the overall value added by generative AI.  

Why it matters:     

The fast increase in the adoption of generative AI tools across large and small businesses has prompted McKinsey to revise its previous forecasts for workplace automation. The new report estimates that approximately half of today’s work activities could be automated between 2030 and 2060, with a midpoint estimated in 2045. This acceleration in the timeline for widespread use of automation is roughly a decade earlier than previously anticipated.

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How it’ll impact the future:        

The McKinsey report states that Generative AI has the potential to automate work activities that currently absorb 60%-70% of employees’ time. However, this does not necessarily mean massive job loss. Instead, it could potentially lead to faster and more precise job performance, adding 0.2 to 3.3 percentage points annually to productivity growth in the global economy. 

In the future, workers will likely need to learn how to use AI tools. If managed well, the predictions for a giant shift caused by generative AI could become a reality and contribute to massive economic growth. 

As several industries adopt generative AI, new jobs will be created, and others will become jobs of the past. The new technology has the potential to act as a catalyst for economic growth, as businesses and industries push further to embrace automation. 

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