- You would be convinced that artificial intelligence (AI) has ushered in a new Industrial Revolution if you watched Nvidia CEO Jensen Huang’s amazing presentation at Taipei Computex last month. AI chips have accelerated computing, allowing for the ability to do tasks faster, more effectively, and with less energy.
- According to McKinsey, the global economy might gain between US$2.6 trillion and US$4.4 trillion a year as a result of the productivity gains associated with generative AI. That would be equivalent to annually adding one UK economy to the world economy.
- Business enhancements in four areas will account for around three-fourths of productivity: software engineering, customer operations, marketing and sales, and research and development (R&D).
- Consider this: rather than teaching everyone to code, we can truly translate your requests through the drafting of the screenplay, the production of the video, and even the process design, all done by AI. Ask for the most recent version of ChatGPT.
- Although the computer knows the answers, in the end, a person will either carry out the necessary actions or choose to do nothing at all.
- In actuality, productivity (measured as output per capita) will depend on how individuals, businesses, communities, and nations drive the productivity change, even though generative AI will have a significant impact on all industry sectors, including banking, retail, high-tech, and life sciences.
- Generative AI is a social and political concern since it automates many individual tasks, which transforms the way we work.
- When AI can do automated translation, publish the transcript, and even suggest the next work agenda, cross-border language barriers are eliminated.
- Given that McKinsey calculates that existing Generative AI and other technologies have the potential to automate job tasks by as much as 60% to 70% of employee time, it is understandable why many in the workforce are afraid of AI adoption and are resistant to change.
- According to the most recent European Union (EU) Competitiveness and Sector Benchmarking Report 2024, the EU recognizes at a high level that the area is running out of time since its sector has been steadily losing market share on international marketplaces.
- EU enterprises are losing relevance, and their leading position in technology is in jeopardy.
- The explanation is clear to all: the European Union’s market is composed of several national markets rather than a single market with a single currency, the euro, and is thus much more fragmented than those of the United States or China.
- The numbers tell it like it is. Compared to China (28.3%) and the United States (14.5%), the EU’s share in global commerce has decreased by one-third to the second position (16%) in 2021.
- Between 2005 and 2023, EU firms dropped to third position in terms of market revenue among Fortune Global 500 companies; American companies lead with 31.8%, followed by Chinese companies with 27.5%, while EU companies trail with 15.5%.
- Compared to China or the US, Europe is far behind in adopting 5G technology.
- The European Union (EU) has fallen short of China (2.4%) and the United States (3.5%) in terms of research and development (R&D) investment by 2021, even though R&D is a major engine of innovation and technical leadership. This is especially noticeable in the industrial R&D spending of the top 2,500 corporations worldwide.
- With a mere 17.5% of the market, the EU is now in third position, behind China (17.8%), while the US dominates with 42.1%. Chinese technical goods, such as industrial gear, and electric vehicles (EVs) are already sweeping the EU markets.
- It is not a surprise that EU businesses have been moving their manufacturing abroad given the higher energy prices in the EU compared to the US or China, as well as the more complicated EU laws than those in other markets.
- Since the greatest social protection criteria have been in place, labor productivity has stalled. According to the paper, the EU’s regulatory framework needs to be updated to support and incentivize innovators, lessen regulatory silos at the national and EU levels, and improve technology deployment via more public-private cooperation.
- Practical sector transformation in virtually all emerging markets and developing economies (EMDEs) may benefit from these European examples.
- Even though the 2008 global financial crisis startled the world, Europe has not structurally reformed the labor and business sectors to increase overall competitiveness.
- The disjointed banking system dominates the financial industry, which is nonetheless risk-conservative. German, French, and Swiss banks have suffered greatly from incompetent consolidations and stricter rules, leaving them a shell of their past worldwide might.
- Who is in charge of the structural changes is the true problem. The private business sector in America is still vibrant and dedicated to innovation and profitability. In China, the ruling party or government takes the lead, although enough business rivalry is permitted to support national objectives. Nobody claims that Chinese or American firms are inherently neoliberal.
- The EU and many EMDEs continue to struggle with the conflicting desires of modern industrial policy, state involvement, and the traditional neoliberal goal of free markets. When governments and the general public believed that social and market evils could be resolved by simply enacting more rules and regulations, the neoliberal strategy failed.
- We’ve all learned the hard way that political and legislative obstacles, as well as ongoing litigation by powerful groups opposed to change, may easily thwart laws and programs.
- The process of changing an ecosystem is complicated and calls for both the development of a shared explanation for why the system has to change and the actual implementation of visible initiatives that inspire confidence in the public and show resolve.
- Choose corporate executives who know how to handle institutional change while keeping things business-friendly if you want the economy to shift.
- The nomination of Nadiem Makarim, the former president of the Gojek digital platform, as Minister of Education by Indonesian President Jokowi, serves as an example of how to push beyond the old educational bureaucracy and toward a technology eco-system transformation. bold change requires bold thought, but it has to come from someone with an understanding of business and technology like Jensen Huang.
- The revolution in AI is already occurring at an alarmingly rapid pace. Economies that fail to adjust will be pushed behind. Businesses and communities that adjust effectively will not only survive but prosper.
- That is how Darwinian competition is harsh.
- Andrew Sheng writes on world affairs from an Asian viewpoint. The author’s opinions are those that are presented here.
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