ByMarkPurdyandPaulDaugherty2|WhyartificialintelligenceisthefutureofgrowthCONTENTSThenewfactorofproduction4ThreechannelsofAI-ledgrowth12FactoringinAI15ClearingthepathtoanAIfuture213|WhyartificialintelligenceisthefutureofgrowthTherehasbeenmarkeddeclineintheabilityofincreasesincapitalinvestmentandinlabortopropeleconomicprogress.Thesetwoleversarethetraditionaldriversofproduction,yettheyarenolongerabletosustainthesteadymarchofprosperityenjoyedinpreviousdecadesinmostdevelopedeconomies.Butlong-termpessimismisunwarranted.Withtherecentconvergenceofatransformativesetoftechnologies,economiesareenteringanewerainwhichartificialintelligence(AI)hasthepotentialtoovercomethephysicallimitationsofcapitalandlaborandopenupnewsourcesofvalueandgrowth.Increasesincapitalandlaborarenolongerdrivingthelevelsofeconomicgrowththeworldhasbecomeaccustomedtoanddesires.Fortunately,anewfactorofproductionisonthehorizon,anditpromisestotransformthebasisofeconomicgrowthforcountriesacrosstheworld.Indeed,Accentureanalyzed12developedeconomiesandfoundthatAIhasthepotentialtodoubletheirannualeconomicgrowthratesby2035.Toavoidmissingoutonthisopportunity,policymakersandbusinessleadersmustpreparefor,andworktoward,afuturewithartificialintelligence.TheymustdosonotwiththeideathatAIissimplyanotherproductivityenhancer.Rather,theymustseeAIasthetoolthatcantransformourthinkingabouthowgrowthiscreated.4|WhyartificialintelligenceisthefutureofgrowthThatmissingelementishownewtechnologiesaffectgrowthintheeconomy.Traditionally,capitalandlaborarethe“factorsofproduction”thatdrivegrowthintheeconomy(seeFigure5).Growthoccurswhenthestockofcapitalorlaborincrease,orwhentheyareusedmoreefficiently.Thegrowththatcomesfrominnovationsandtechnologicalchangeintheeconomyiscapturedintotalfactorproductivity(TFP).EconomistshavealwaysthoughtofnewtechnologiesasdrivinggrowththroughtheirabilitytoenhanceTFP.Thismadesenseforthetechnologiesthatwehaveseenuntilnow.Thegreattechnologicalbreakthroughsoverthelastcentury—electricity,railwaysandIT—boostedpr...
