The Economic Potential of Generative AI: The Next Frontier of Productivity

McKinsey recently released a significant report on the economic impact of generative AI. The core point of the report is that AI may reach human-level capabilities sooner than expected, with the median prediction being before 2030. Compared to the predictions made in 2017, the new report is more optimistic about the future of AI.

The report points out that AI has permeated every aspect of our lives. Unlike before, today's generative AI tools such as ChatGPT, Stable Diffusion, etc., are accessible to everyone. The performance of these tools is also rapidly improving, for example, the performance of ChatGPT equipped with GPT-4 has significantly increased.

McKinsey's analysis shows that the application of generative AI across various industries could bring economic benefits ranging from $2.6 trillion to $4.4 trillion annually. This is an increase of 15% to 40% compared to the $11 trillion to $17.7 trillion predicted in 2017.

The report also analyzes the potential impact of generative AI on approximately 850 occupations. Experts simulated various scenarios to estimate when generative AI could perform each of the over 2,100 tasks that make up the global economy. The results show that the total economic benefit of generative AI could reach up to $6.1 trillion to $7.9 trillion per year.

Among the 16 business functions, the annual value of customer operations, marketing and sales, software engineering, and research and development accounts for approximately 75% of the total value of generative AI use cases. Generative AI can also bring value to the entire company by improving internal knowledge management systems.

The report predicts that based on the current performance of generative AI, its capabilities will reach human levels faster than previously estimated in various aspects. For example, the time for the technology to reach an intermediate level of human natural language understanding has been advanced from 2027 to 2023.

Experts predict that generative AI may have the greatest impact on knowledge work, especially in activities involving decision-making and collaboration. The potential for automating expertise has jumped by 34 percentage points, while the potential for automating management and talent development has risen from 16% in 2017 to 49% in 2023.

The report predicts that at least a quarter to a third of jobs will change in the next decade. It is essential for business leaders, government decision-makers, and ordinary individuals to consider how to respond to the opportunities and challenges brought by generative AI.

Overall, this report provides a comprehensive analysis of the significant impact of the generative AI explosion on the socio-economy, offering a reference for all parties to respond to this technological transformation.