If harnessed correctly, artificial intelligence (AI) could boost GDP in Latin America and the Caribbean by one percentage point, says a research report from the Inter-American Development Bank (IDB).
Brazil, for example, could grow 4.1% annually instead of 3.2%. Colombia may experience 4.5% growth instead of 3.7%.
AI bolsters productivity and frees skilled workers to focus on tasks that add value, the report noted, adding that “economic growth of countries that embrace artificial intelligence is expected to be 25% higher, on average, than those that do not.”
The report, put together by the IDB’s Institute for the Integration of Latin America and the Caribbean (INTAL), has also predicted that AI can strengthen the hands of trade negotiators, boosting bilateral trade in the region.
AI can simplify complex trade negotiations by analyzing vast amounts of data relating to trade flows, tariffs, rules of origin, and sanitary regulations, among others.
In addition, the technology can help figure out “the consensus areas” in tough multilateral trade negotiations.
“Artificial intelligence models have a 300% greater predictive capacity than traditional econometric models,” the report added.
AI can prove to be a great tool for countries struggling to overcome physical infrastructure connectivity gaps. By using sensors and the internet of things (IoT), AI can assign port container slots in real time to optimize inventory management.
What’s more, AI can bolster education system, reduce electricity consumption by up to 10%, in addition to bringing about transformative changes in the healthcare sector.
“Diagnosing illnesses with image recognition has a 96% accuracy rate,” says the report.
Nevertheless, IDB has warned that AI can set off conflicts in labor markets, and bring political and ethical challenges, because the technology may reduce between 36% and 43% of existing jobs.
Countries with lower GDP per capita and greater inequality are at a greater risk of suffering jobs losses.
“Artificial intelligence can bring us prosperity, but we need to ensure we do it in a way that secure and inclusive,” says INTAL’s Gustavo Beliz. “To better manage the transition for displaced workers, governments must put in place policies and strategic plans that are designed for artificial intelligence.”