Key Insights
Key takeaways from
"AI Trends Report: Industry Impact of Artificial Intelligence" report published by BofA Global Research
CFTE summarised “AI Trends Report: Industry Impact of Artificial Intelligence” report by BofA Global Research. The report identifies AI as a driving force in the fifth industrial revolution, emphasising its role in analyzing the exponentially growing global data. Key AI technologies like machine learning, deep learning, and natural language processing are highlighted.
Key Aspects
- Focus on generative AI, its applications in various sectors, and its impact on productivity, especially in data-intensive industries.
Table of Contents
- Introduction: AI and the Fifth Industrial Revolution
- AI Technologies and Their Capabilities
- AI’s Role in Digital Growth and Industry Transformation
- Sectors Impacted by AI: Productivity and Automation
- Future of AI: Multimodal Applications and Challenges
- Economic Impact: GDP Growth and Job Market Changes
- Risks and Opportunities in AI Adoption
- The Future of Work: Automation vs. Human Creativity
Key Findings and Insights
This report will give you an insight into:
- AI, a game changer for the next decade of digital growth
The BofA Global Research U.S. Software Technology team believes AI technologies can be embedded across industries and simplified for the average user which could drive adoption over the next decade. They expect stock performance for large tech companies to be tied to their AI development, estimating AI/ML (machine learning) capex investment to exceed USD$40 bn. - Sectors using text data are likely to incorporate this tech to increase productivity
Sectors that can combine computing power, data and talent to enable AI could capitalize on the commercial opportunities. Operating costs (e.g., semiconductors, staff) could present a large barrier to entry. As the parameter size increases, costs increase too. This could be challenging to absorb when such models perform billions of queries a day. For this technology to be more viable, we would likely need a 10x-to-20x improvement in efficiency, otherwise it would be too costly for entrants to deploy them commercially. But falling hardware costs for larger companies could potentially alleviate this issue. - A $15 trillion market by 2030
AI could contribute up to USD$15.7 tn to the global economy by 2030, while open data (data that anyone can access, use and share) has the potential to unlock USD$3.2 tn to USD$5.4 tn in economic value annually via, for example, reducing emissions, increasing productivity and improving healthcare. - A supportive investment landscape for AI
AI adoption has more than doubled over the past five years with investment in AI increasing quickly: Funding of generative AI increased by 71.4% year over year in 2022.4 In particular, global private investment in AI increased 48% year over year in 2021 to USD$93.5 bn, more than double the total private investment in 2020. - Risks of the robots
COVID has hastened the adoption of technologies such as AI, chatbots, robot process automation (RPA) in white collar roles and industrial robots in blue collar jobs – all of which we estimate could displace 2 billion jobs by 2030. Up to 47% of U.S. jobs could impacted from computerization as less time is spent on routine and manual tasks that require time in training and education. For example, the Transport and Logistics sector could have relatively more day-to-day tasks that can be automated (e.g., conducting document checks at customs to ensure a smoother process). - North America and Europe more at risk of automation
By region, jobs in North America and Europe are more at risk of automation (averaging c.43% and c.35% across different sectors, respectively), whereas countries in Asia have a much lower potential. This can be explained by the industry composition and differences in how regions perform the same job function. Countries with a greater focus on manufacturing have a higher risk of automation. - Machines have their limits: premium for jobs with intelligence and creativity
Workers should look toward tasks with skill sets that robots and computers cannot easily accomplish in the next 10 to 20 years. For instance, dexterity is something that current robot hardware technologies have not yet mastered. There will likely be an increasing premium for jobs that require social intelligence, creativity and complex problem-solving.
New jobs are likely to come from health, STEM (science, technology, engineering and mathematics) and managerial roles AI could also create new jobs, particularly with regard to training and maintaining the AI technology. The net result on the labor market depends on the number of jobs created versus the number that are automated. - Job market: automation
Since ChatGPT can generate human-like content, it is possible to automate tasks, hence displacing certain tasks. It could impact the Advertising, Art and Design and Entertainment sectors. Health and Science are least likely to experience automation but Manufacturing and Transportation are the most likely.
Travel and Transportation are some of the industries which could see the greatest potential incremental value from AI. In contrast, the more science-based sectors like Aerospace and Defense, Semiconductors, Pharmaceuticals and Healthcare could see relatively some of the lowest potential incremental values from AI. Hence, these sectors are less likely to experience job displacement by ChatGPT or similar generative AI programs. - Don’t underestimate humans’ ability to one-up technology
There are areas where humans can beat machines. In the future, we believe there will likely be an increasing premium for jobs within occupational groups that require social intelligence, creativity and complex problem solving as opposed to repetitive, low-dexterity skills. For instance, an event planner requires more social intelligence than a dishwasher in hospitality, fashion designers require more creativity than a seamstress in apparel, and a medical surgeon requires greater perception and manipulation of tasks than a clinic receptionist within healthcare. The mass adoption of AI can usher society into the fifth industrial revolution. We are at a defining moment – like the internet in the ‘90s – where AI is moving toward mass adoption, with large language models like ChatGPT finally enabling us to fully capitalize on the data revolution.
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