AI: the new electricity

Artificial Intelligence (AI) is transforming the world, with the potential to rapidly and significantly impact business and global growth. The technological revolution it represents is comparable to the adoption of electricity nearly 100 years ago.

The rapid adoption of this technology demonstrates its disruptive potential. To reach 100 million users globally, fixed-line telephony took 75 years, mobile phones 16 years, the Internet 7 years, and WhatsApp 3 years. ChatGPT, one of the leading AI applications, achieved this milestone in just 2 months.

AI's potential goes beyond daily applications like Netflix movie recommendations or facial recognition filters on TikTok. Its true impact lies in its ability to enhance labor productivity. "Productivity isn't everything, but in the long run, it’s almost everything," according to Nobel laureate in economics, Paul Krugman.

It's crucial to formulate public policies that promote the diffusion of AI across the economy.

Consistently, a recent study by Harvard Business School found that consultants using generative AI, such as ChatGPT or Google's Gemini, complete 12% more tasks and finish them 25% faster, on average. AI's impact is also beginning to extend to public administration. For instance, in Togo, AI improved the targeting of a cash transfer program by reducing leakage and ensuring funds reach those who need them most.

Given these developments, it's crucial to formulate public policies that promote the diffusion of AI across the economy. According to McKinsey, AI could contribute 5% to Latin America and the Caribbean's GDP by 2030. Although this figure is significant, it represents only one-third of the expected impact in North America (15%). The United Nations attributes the lower impact in our region to limited public investment in science and technology, insufficient skill levels necessary to adopt AI, and the high informality and prevalence of small businesses in the economy.

Technological transformations typically follow a "J" curve pattern: slow progress initially, followed by exponential improvement after a certain point. For Peru to catch this wave of technological revolution in time and contribute to the country's development, it is crucial that businesses and the government work together to increase the adoption and efficient use of AI.