Artificial intelligence (AI) could nearly double Singapore’s annual economic growth rates by 2035, changing the nature of work and spawning a new relationship between man and machine, reveals new research from Accenture.
The research also found that Singapore is at the forefront to integrate innovation and technologies into the wider economy, ahead of the largest economies in the world such as the United States, Germany, United Kingdom & Japan.
The potential to significantly boost the labour productivity in Singapore will be driven by innovative AI technologies that will enable the workforce to make more efficient use of their time and specialize in what humans do best – create, imagine and innovate. With the adoption of AI, Singapore would only require 13 years for its economy to double in size, while without AI, it will take the country 22 years.
“As Singapore advances its smart nation vision, the adoption of AI will propel economic growth and potentially serve as a powerful remedy for stagnant productivity and labour shortages,” said Lee Joon Seong, managing director, ASEAN Accenture Analytics Lead. “The combinational effect of AI, cloud, sophisticated analytics, robotics and other emerging technologies is already starting to change how work is done by humans and machines, and how organizations interact with consumers in startling ways.
Accenture Research, in collaboration with Frontier Economics, modeled the impact of AI in 33 economies that together generate more than 80 percent of the world’s economic output. The research compared the size of each country’s economy in 2035 in a baseline scenario, which shows expected economic growth under current assumptions, and an AI scenario which shows expected growth once the impact of AI has been absorbed into the economy.
AI was found to yield the largest uplift in economic growth for Singapore, potentially increasing its annual growth rate from 3.2 percent to 5.4 percent by 2035, translating to an additional USD $215 billion in gross value added (GVA). This is ahead of other large economies such as the United States, with AI potentially adding USD $8.3 trillion in GVA by 2035, increasing its annual growth rate from 2.6 percent to 4.6 percent by 2035.
In the United Kingdom, AI could add an additional USD $814 billion to the economy by 2035, increasing the annual growth rate of GVA from 2.5 to 3.9 percent. Japan has the potential to more than triple its annual rate of GVA growth by 2035, and Finland, Sweden, the Netherlands, Germany and Austria could see their growth rates double.
In Singapore, research showed that AI will increase labour productivity by 41 percent by 2035, the highest amongst the developed economies.
The potential to significantly boost the productivity of labour will be driven by innovative AI technologies that enable people to make more efficient use of their time and do what humans do best – create, imagine and innovate new things.
The productivity increase dramatically reduces the number of years required for the largest economies in the world to double in size. This “doubling time” is an indicator of economic development and the results are primarily driven by a country’s ability to diffuse technological innovations into its wider economic infrastructure.
To fulfil the promise of AI as a new factor of production that can reignite growth, Accenture recommends firms, consumers and society to embrace emerging technologies by taking the following steps to navigate the complexity of issues;
- Prepare the next generation- integrate human intelligence with machine intelligence so they can successfully co-exist in a two-way learning relationship and re-evaluate the type of knowledge and skills required in the future.
- Encourage AI-powered regulation- update and create adaptive, self-improving laws to close the gap between the pace of technological change and the pace of regulatory response.
- Advocate a code of ethics for AI- ethical debates should be supplemented by tangible standards and best practices in the development and use of intelligent machines.
- Address the redistribution effects- policymakers should highlight how AI can result in tangible benefits and pre-emptively address any perceived downsides of AI, helping groups disproportionately affected by the changes of employment and incomes.
“Artificial Intelligence heralds a dramatic potential for growth for both the Singapore economy and for humans,” said Mark Purdy, managing director and chief economist, Accenture Research. “Our research strongly shows that AI can unleash remarkable benefits in Singapore and many countries, countering slow economic growth and lagging productivity.”