Disruptive Innovation: AI Will Spark Exponential Economic Growth
(First published on IntellZine on April 4, 2024, https://www.intellzine.com/2024/04/disruptive-innovation-why-ai-will-spark.html … Repeat here with permission.)
The innovation and investment guru Cathy Wood gave a TED talk in December 2023 about 5 pivotal innovation platforms that will (continue) to change the world as we know it. Her group expects to see exponential sustained growth that is fueled by the productivity gains in these areas, especially where they converge. The 5 platforms (AI, Robotics, Energy Storage, DNA sequencing, and blockchain) are described below, with AI in the center. One example she uses is the rapid move to self-driving taxis. TED talk with Cathy Wood, Why AI Will Spark Exponential Economic Growth. (2023, Dec. 18).
The productivity gains are so huge and so sustained that it will dramatically change the global economy with sustained GDP growth of 6% to 8%. Productivity gains can be distributed (at the macro level) in three ways: higher wages, higher profits, and deflation. She expects all 3. Note disinflation, is the slowing rate of inflation while deflation is negative growth in prices. This means that more goods and more services can be produced more cheaply. Usually we think of lowering prices – deflation – coming as a result of a good recession, i.e., destructive innovation.
This new AI economy will create a whole new type of disruptive innovation. Disruption to the workforce will be massive: taxi drivers, truck drivers, coders, factory workers, designers. The US that has been stuck at full employment (less than 4% unemployed) will suddenly get some relief. The people who develop the new skills will have very high-paying jobs, others will be left out.
Wood argues that the Federal Reserve, that has been so worried about inflation for so long, is way behind the curve, because productivity and sustained economic growth are already here. The Fed’s new job, soon, will be managing the drop in interest rates and deflation.
The old nautical adage: a rising tide raises all boats. A rapidly growing world economy will raise most boats: some boats a lot, some a lot faster than others.
You: Summarize the 5 technologies that Cathy Wood believes will converge to produce exponential economic growth.
Copilot (2024, April 4)
Investor Cathie Wood envisions a unique moment in technology marked by the simultaneous evolution of five pivotal innovation platforms. These platforms are converging, creating unprecedented opportunities for growth and transformation. Here are the five technologies she highlights:
- Artificial Intelligence (AI):
- AI is reshaping economic paradigms.
- Predicts a surge in global GDP growth and productivity.
- Drives exponential productivity growth.
- Robotics:
- Robotics advancements are accelerating.
- Automation and efficiency gains across industries.
- Energy Storage:
- Energy storage solutions are evolving rapidly.
- Enables renewable energy adoption and grid stability.
- DNA Sequencing (Multiomic Sequencing):
- Advances in DNA sequencing technology.
- Revolutionizes healthcare, personalized medicine, and biotechnology.
- Blockchain Technology:
- Blockchain’s decentralized ledger system.
- Disrupts finance, supply chains, and data security.
Wood emphasizes the need for businesses and investors to adapt to this convergence to stay ahead in the changing landscape. These technologies hold immense potential for exponential economic growth!
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Wood, C. (2023, Dec. 18). Why AI Will Spark Exponential Economic Growth. TED Talks. Retrieved from: https://youtu.be/rQEh7d-qa38?feature=shared
