Artificial intelligence (AI) has the potential to boost global economic output by up to 15 percentage points, and in Africa by up to 4.9 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, according to new PwC research.
PwC’s report, Value in Motion is based on data-driven scenario analysis which reveals that the global growth dividend from AI is not guaranteed and depends on more than just technical success – it also hinges on responsible deployment, clear governance and public and organisational trust.
In other scenarios analysed by PwC, characterised by lower trust and co-operation, the incremental boost to the global economy from AI would be more muted at 8%, or in a pessimistic scenario just 1%.
The research finds that rapid reconfiguration of the economy is already under way. PwC analysis indicates that the pressure for businesses to reinvent themselves is at some of the highest levels seen in the last 25 years across six out of nine sectors in Africa.
This same research identified $150,54-billion in revenues in Africa set to shift between companies in 2025 alone, even prior to the recent global increase in tariffs.
PwC’s 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.
Dion Shango, CEO of PwC Africa, says: “As the structure of the economy transforms, value will increasingly come from organisations that can connect the dots across traditional industry boundaries. 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.”
Climate impact
PwC’s analysis shows that while AI is set to accelerate growth, the costs of physical climate threats will impose economic constraints. PwC’s economic modelling suggests that physical climate impacts could leave the African economy over 12% (globally: 7%) smaller in 2035 in all scenarios than it would have been otherwise.
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% globally.