GenAI productivity gains will skew towards services
Productivity gains from the use of Generative AI (GenAI) and other similar technological advancements are set to boost medium-term economic growth, but the gains will be spread unevenly across sectors and skew towards the services side of the economy.
Oxford Economics has quantified an ordinal measure of sectoral GenAI exposure, indexed on a scale of 0 to 1. The index is constructed so that a higher number represents greater potential for GenAI-driven productivity and output gains.
What you will learn:
- Gains will take the form of automation or augmentation of tasks, either replacing the need for human labour or making it more effective. We find services sectors like information, financial services, and R&D have substantial potential for productivity gains.
- The speed and extent of AI adoption will vary across sectors. Sectors taking the lead with early adoption, such as information and finance, are among those we expect to experience the largest productivity gains and have a higher share of start-ups and large firms.
- In the near term, the rollout and adoption of GenAI technology will have positive impact on demand for enterprise software, computational power and storage, communication links, and internet. Growth in global enterprise tech spend will be over twice the pace of overall GDP. This will support continued rapid growth in the construction of data centres, which will in turn boost demand for semiconductors and electricity.
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