More and less optimistic forecasts on AI and global economic growth
Global growth from AI is not guaranteed. AI has the potential to boost global economic output by up to 15 percentage points over the next decade. This would effectively add one percentage point to annual growth rates – on par with the growth increment the world began enjoying with 19th century industrialisation but this depends on more than just technical success. It also hinges on responsible deployment, clear governance and public and organisational trust, according to a data-driven analysis by consultancy PwC.
In scenarios with lower trust and co-operation, the incremental boost to the economy from AI would be more muted at 8%, or in a pessimistic scenario just 1%, according to the report.
Key findings:
- AI’s potential to boost global growth hinges not just on its capabilities, but on ability to deploy it responsibly and earn society’s trust.
- However, physical climate risks could leave the global economy nearly 7% smaller in 2035 than it would have been otherwise.
- New cross-industry ways of working will allow companies to seize growth opportunities.
The company says that analysis indicates that the pressure for businesses to reinvent themselves is at some of the highest levels seen in the last 25 years across 17 out of 22 global sectors, with US$7.1 trillion in revenues set to shift between companies in 2025 alone, even prior to the recent global increase in tariffs.
“Research suggests that over the next decade, industries will reconfigure to meet human needs in new ways, leading to the formation of new ‘domains’ that cross traditional sector lines. For example, the rise of electric vehicles is bringing electricity providers, battery manufacturers, tech firms and others into the mobility domain, enabling them to create value alongside automobile manufacturers.”
“By focusing on evolving customer needs and using technology to dramatically change the way business operates, business leaders can unlock a step change in growth”, says Mohamed Kande, Global Chairman, PwC.
While AI is set to accelerate growth, the costs of physical climate threats will impose economic constraints. Economic modelling suggests that physical climate risks could leave the global economy nearly 7% smaller in 2035 than it would have been otherwise, according to the report.
“Increased AI adoption is expected to lead to increased energy use by data centres. However, modest use of AI to drive energy efficiency could offset this increased use of energy. PwC estimates that the energy use and emissions impact of AI would be neutral if each additional percentage point of AI use led to innovations which cut energy intensity by just 0.1%.”
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