Artificial Intelligence, engine for the economy

Artificial Intelligence has already found its place in the world economy. The pressure to reinvent businesses due to technology, climate change and several other megatrends will intensify in the coming years, with generative artificial intelligence (GenAI) being a catalyst that will drive efficiency, innovation and transformational change, according to the PwC CEO Survey 2024. In Romania, half of the company leaders surveyed believe that GenAI will profoundly change the way companies operate and intensify competition, even if the adoption of new technologies is slower than in other countries. In this context, GenAI can contribute to the growth of the economies of many countries, as shown by a recent analysis by strategy&, the strategy department of the PwC global network. According to her, the use of GenAI has the potential to generate an additional annual economic growth of between 0.4% and 0.7% in Europe, until 2030. At a time when the advance of the European gross domestic product is estimated at 1.4% , the contribution that GenAI would bring is not at all negligible, it is mentioned in a press release from PwC. Dinu Bumbăcea, country managing partner of PwC Romania, said: "Of course, the estimates are conditioned by certain changes, and the mentioned analysis carries out two scenarios of the implementation of GenAI to measure the possible impact on economic growth. In an optimistic scenario, a large number of companies are receptive to GenAI innovation and develop a strategy in this sense, are willing to make the necessary investments (which can generate a profit only after a certain time) and assume the associated risks, and public policies and regulations largely support the implementation in Europe Under these conditions, up to 90% of the total productivity increase due to GenAI would be achieved, which would lead to an additional increase of 0.7% per year, i.e. about one trillion dollars. until 2030". Also, in a moderate scenario, where companies adopt GenAI in a limited number, and by 2030 no more than 40-50% of the potential to increase productivity is realized, the additional increase would be 0.4% . In this scenario, companies will be affected by the lack of skills and funding, as well as the lack of clarity of regulations or a proactive public policy regarding GenAI, reveals the quoted source.

The emergence of GenAI as an accessible technology in all sectors of the economy can significantly improve the innovation capabilities and efficiency of companies along the entire value chain. Therefore, it will bring productivity gains even greater and more efficient than other disruptive technologies of the past. In addition, GenAI could contribute to limiting the structural shortage of skilled labor in Europe, while conferring both short-term and long-term competitive advantages to companies that adopt it successfully and quickly.

The analysis divides the beneficiary sectors into three categories from the point of view of GenAI's impact on both revenues and final performance. Thus, sectors with high impact are: technology and software, entertainment and media, pharmaceuticals and medical sciences, financial services, professional services and telecommunications; aspiring industries, which can gain new efficiencies from GenAI applications developed largely outside their domain, with impact on the bottom line: consumer goods and retail, support services, passenger transport, travel, hospitality, health and real estate; low-potential sectors where physical labor or production dominates the value chain and automation, partially complemented by GenAI, can make a smaller contribution to productivity if effectively implemented: chemicals, high-tech manufacturing , public sector (public administration and other services, defense and education), automobiles, industrial production, construction, public utilities, goods and transport, agriculture. According to the PwC analysis, countries whose economies are based on industries with a high impact of GenAI will have more to gain, with Switzerland, Sweden, Belgium or the UK now well positioned. The share of companies with high impact and potential in the total economy is, on average, higher in the USA and Great Britain than in the rest of the European states. Globally, the US is the leader in GenAI innovation, with an unmatched ecosystem of large technology providers, start-ups and access to funding. At the same time, Chinese companies are rapidly adopting and tending to integrate GenAI into their products and daily life applications.