19 Jun 2018
Can AI help the UK economy?
It hasn’t been a great year for the UK economy.
With the EU departure looming, economic growth has screeched to a halt, collapsing to just 0.1% in the first quarter of 2018 – the UK’s weakest quarterly growth since 2012.
This, coupled with a slumping pound and disappointing GDP numbers, paint a grim picture for the UK economy for the long months and years ahead.
But there may be a light at the end of the tunnel, and the UK’s burgeoning “thought economy” is leading the way.
Here’s how artificial intelligence could offer some practical solutions…
The “thought economy”, and why it matters
As the UK economy modernises and its economy matures, a radical shift in strategy is necessary. Gone are the days when industry and manufacturing could be counted on to buoy the UK’s economic performance. In a tiny country with a huge population, limited natural resources to draw from, and a foreign policy that has abandoned the colonial interests which previously kept it afloat, new paths to economic success must be paved.
That’s not to say that the UK is entirely without resources, however. A second-to-none educational system, capable citizens, and national penchant for creativity and entrepreneurship have allowed exciting new companies in the tech, digital, and artificial intelligence sectors to flourish even as the UK economy as a whole has struggled.
And, in a digital world where such technologies are blazing new, profitable trails by the day, the GDP-driving potential of these industries should not be underestimated.
For a nation like the UK, moving toward a thought-based economy, if only to augment current economic drivers, might just be the ticket to better economic outcomes.
Speak softly, and carry a big AI
According to research in PWC’s The Economic Impact of Artificial Intelligence on the UK Economy report, “there will be significant gains across all UK regions, with England, Northern Ireland, Scotland and Wales seeing an impact from AI in 2030 at least as large as 5% of GDP.”
This is presuming, of course, that the UK government makes the necessary changes to support growth in the burgeoning AI sector sooner, rather than later.
The Economist’s Economic Intelligence Unit (EIU)’s report Risks and rewards: Scenarios around the economic impact of machine learning warned in 2017 that if the UK does not take enough action to support AI initiatives, the country’s economy will be US$420bn smaller in 2030 than it was in 2016.
However, should the artificial intelligence industry receive the support it needs from the UK government, the investment in AI could well prove to pay big dividends for the UK economy.
Accenture’s Artificial Intelligence is The Future of Growth report sums the potential impact of AI on existing economies up nicely: “Artificial Intelligence offers the ability to amplify and transcend the current capacity of capital and labour to propel economic growth.”
A new vision for the UK economy
As artificial intelligence wunderkind Dr Neil Yager puts it, “The economic benefits of investment in AI extend far beyond the first order effects – where AI companies directly provide employment, generate tax revenue, etc. There are also more general ways that AI can help the economy. For example, AI adoption helps UK companies from other industries scale and be more competitive on the global stage.”
Indeed, while the growing number of AI companies in the UK is having a direct impact in its own right, the opportunities for direct employment and tax revenues will likely be dwarfed by the potential presented by augmenting and improving existing industries driving the UK economy.
The fact is, fears that AI will negatively impact the UK economy are entirely unfounded, and the potential benefits of embracing AI far outweigh the risks (such as they are).
For a nation struggling to keep its head above water in a rapidly evolving global economy, embracing a potentially game-changing technology like artificial intelligence at what is still a relatively early stage is a strategy that every UK citizen should be able to get behind.