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UBS Chief Economist Paul Donovan assesses how Artificial Intelligence (AI) may affect productivity and whether the European Union (EU) could gain an advantage over the United States (US). He notes that AI’s productivity impact remains largely potential, but argues that education structures and skill distributions across workforces in the US, key European economies and the United Kingdom (UK) could shape relative competitiveness as AI adoption spreads.
AI productivity and education-driven edge
“The potential for the shiny new toy of artificial intelligence to generate productivity is still more an ideal than a reality.”
“But adopting any new technology should eventually improve economic efficiency (otherwise, why change?).”
“As investor interest broadens out to the application of technology, will any economy have a competitive advantage in using AI?”
“Academic work suggests that if AI improves an individual’s productivity, it will boost low-skilled workers’ productivity proportionately more.”
“If AI productivity gains are unevenly distributed, and disproportionately benefit workers with mid-level education, the US may be at a competitive disadvantage relative to other major economies.”
