Artificial intelligence supports economic growth

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The global demand for artificial intelligence technology will continue to grow. It is estimated that artificial intelligence will add USD15.7 trillion to the global GDP by 2030.

The revolution associated with artificial intelligence (AI) is often analyzed in the context of robots or drones that can perform tasks previously reserved for humans. However, its impact will also be felt through a more effective utilization of the increasing amounts of data. Machine learning systems, which are able to detect repetitive patterns by analyzing large data sets, are among the most important applications of today’s artificial intelligence.

Rivalry between the United States and China

In some industries, deep learning techniques — the most advanced form of the machine learning technology — could potentially enable the creation of value equivalent to as much as 9 per cent of the company’s revenues, as estimates McKinsey in its report. This translates into the USD trillions of potential economic value, with the United States and China clearly leading the way. The greatest economic gains from AI will be reaped by China (where the GDP growth will be higher by 26 per cent by 2030) and North America (14.5 per cent), which is equivalent to a total amount of USD10.7 trillion.

China could become an AI powerhouse by 2030. This is mainly due to the fact that this country has a clearly defined national development strategy, which provides financing for AI research, development, and implementation. Chinese president Xi Jinping has included AI, Big Data, and the internet as the pillars of the “Made in China 2025” plan which is supposed to help transform China into an advanced industrial economy over the coming decades. The close ties between the government and the technology sector will certainly help in achieving this goal.

Additionally, the Chinese authorities — both at the central and local level — devote a lot of attention to the development and adaptation of infrastructure (e.g. smart roads for smart cars), allocating considerable financial resources for that purpose. In this way, they support the actual real-life implementation of artificial intelligence technologies.

According to estimates, in 2017, the total expenditures on artificial intelligence systems in China amounted to about USD12bn, and are expected to rise to USD70bn by 2020. In 2017, Chinese start-ups received 48 per cent of global investments in artificial intelligence (in 2016, their share only reached 11 per cent), while the American start-ups received 38 per cent of the funds.

America’s Got Talent

China also has access to vast amounts of consumer data — the driving force behind the development of artificial intelligence. China collects a lot of data about its citizens, because the state monitors everything from the moment of birth, and face recognition software is already very widespread. Additionally, the Chinese citizens provide huge amounts of data when they order, buy, pay, and play games online. The collection and storage of data is made possible by the fact that the regulations concerning private data protection are much more relaxed than, for example, in Europe, where new provisions on privacy protection, known as the General Data Protection Regulation (GDPR), were recently introduced.

On the other hand, however, the US is very powerful, because American companies own the technology needed to utilize advanced AI algorithms, and have access to the equipment developed by the United States. The United States is also home to the world’s top institutions involved in research and education in the field of AI, including the Massachusetts Institute of Technology, the Carnegie Mellon University, the Stanford University, and the University of California, while companies such as Facebook, Google, and Amazon have access to enormous amounts of data about their users.

Additionally, the American economy is characterized by an unmatched diversity of skills necessary for AI within the general population and this diversity is crucial for the AI development. If the data sets used to train algorithms are limited or biased, or if those creating the AI algorithm do not recognize or do not take into account these limitations and biases, then the result will be faulty. In this way, the ability to utilize a variety of talents from around the world for the purposes of AI gives the United States an enormous advantage in developing algorithms for global use. Similarly, the data generated by the diverse population of the United States are invaluable in training artificial intelligence algorithms that will be effective throughout the world.

However, according to a report prepared by the White House, China now ranks the first in terms of the number of published and cited research works and has the most patents in the field of AI technology, followed by the United States and Japan. Additionally, more articles on deep learning are published in China than in the Unites States.

As a result of China’s progress in the development of AI, there is a growing concern in the United States, that the preeminence of American technology can no longer be taken for granted. The plans of President Donald Trump’s administration concerning a trade war with Beijing are at least in part motivated by fears of Chinese advances in the area of new technologies.

The threat of techno-authoritarianism?

The signs of an intensifying “arms race” between China and the United States in the AI emphasize the importance of this technology for the future of many fields, especially considering that the improvement of its applications is dependent on the increasing amounts of data. Most people find it difficult to understand, let alone control all the information collected about them. Moreover, along with the development of the era of artificial intelligence, the leverage generated by data aggregators will continue to grow.

One of the reasons why the competition for AI has been so intense is also the fact that it is tied to the race for military superiority. In addition to answering trivial customer inquiries and controlling driverless cars, this technology can be used to synchronize the operation of a swarm of drones, to analyze photos taken by spy drones, and to steer autonomous boats. Domination in the field of AI technology could bring about a significant change in the nature of military operations, while the technological shifts could undermine the military advantage of the incumbent great powers.

A country that strategically implements AI technologies can obtain an advantage over others, because it will be able to develop faster — in particular due to changes taking place in the labor market. In the future, the cities in such a country could function more efficiently, because autonomous cars and intelligent infrastructure will optimize traffic. The largest companies will have the best data concerning consumer behavior, and the residents will live longer, because AI will revolutionize the diagnosis and treatment of diseases. Meanwhile, the sphere of national defense and security will be different than today, because autonomous weapons will replace soldiers and pilots, and war will be waged in cyberspace.

In this context, it is also important to note that in today’s digital world, both in China and in the West, political power is increasingly based on controlling and understanding data and on using data to influence people’s behavior. These capabilities will be compounded along with the development of the next generation of mobile networks, which will be faster and which will generate even more data. Some observers are concerned that in the current socio-political conditions of many countries, AI could also be a factor conducive to the emergence of techno-authoritarianism.

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