Can AI solve Canada’s productivity crisis?

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Is artificial intelligence the answer to Canada’s productivity woes? That’s a query that has been extensively mentioned since issues concerning the nation’s lagging per capita output had been thrust into the highlight in May by Bank of Canada senior deputy governor Carolyn Rogers, who declared that issues had reached “emergency” ranges and required the eye of policymakers.

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Since then, proposed options have various from higher investments in job retraining, higher regulatory and tax certainty for companies and extra competitors throughout a variety of industries.

But accelerating the adoption of AI, which seems poised to turn out to be probably the most transformative applied sciences of our time, has been among the many most promising and common proposals. In a report in May, TD Bank estimated that generative AI might add as a lot as eight per cent to Canada’s GDP over the subsequent 10 years, if extensively adopted all through the financial system.

A recent study from the Conference Board of Canada estimated that generative AI has the potential to spice up GDP by practically two per cent, earlier than new classes of services and products had been taken into consideration. It additionally discovered that three quarters of these companies which have already adopted AI into their enterprise fashions stated it made them extra aggressive.

“We have this generational opportunity right now and it’s really a call to action,” stated Alain Francq, director of innovation and know-how on the Conference Board of Canada. “I think the bells are ringing right now, that we have to find our place in the AI world.”

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The potential advantages of AI are exhausting to argue with. Generative AI can streamline duties and automate content material producing processes. Google LLC estimates that generative AI might save the typical employee 100 hours per yr.

Nick Romano, chief govt and co-founder of Deeplite, a Toronto-based AI firm whose purchasers consist primarily of semiconductor corporations, stated utilizing his AI agent helps him save time along with his personal enterprise. Translating difficult analysis at his agency into inside advertising and marketing supplies now takes no time in any respect.

Reasons to be skeptical

“What would have taken weeks between marketing and the research team going back and forth, I can do that in a morning now,” Romano stated. “By just feeding the information into my AI agents.”

On a bigger scale, there are corporations corresponding to Daisy Intelligence, a Toronto-based AI firm that helps retail purchasers and the insurance coverage trade discover value financial savings and fraud, utilizing a reinforcement studying AI system.

“In retail, we are able to a grow a retailer’s total company sales by five per cent,” stated Gary Saarenvirta, Daisy’s chief govt and founder. “Our largest client is a $30-billion revenue client, using AI we have been able to grow their sales north of $1 billion a year.”

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At the identical time, there are causes to be skeptical that the widespread adoption of AI will likely be a straightforward repair.

Despite being residence to the world’s most outstanding AI researchers, Canada presently sits beneath its friends within the fee of AI adoption amongst companies.

A Statistics Canada report in February discovered that only one in 10 companies plan to make use of generative AI.  Among our friends within the Organisation for Economic Co-operation and Development (OECD), Canada ranks within the mid-pack.

Companies face a variety of challenges in the case of AI adoption, a few of which can rely on the corporate measurement. While small companies face assets points, greater corporations face points with integrating the know-how on a mass-scale.

“Based on the data, it’s usually large companies that have the greatest challenges in adopting new technologies,” stated Patrick Gill, senior director of the Business Data Lab on the Canadian Chamber of Commerce. “Think about the change management involved when you’re trying to get large workforces to try a new app.”

Hesitancy to undertake AI is also because of mistrust amongst Canadians. A worldwide IPSOS ballot revealed final yr reveals Canadians are extra nervous concerning the adoption of AI than their international friends, rating twenty ninth out of 31 international locations in the case of the assumption that the know-how has extra advantages than drawbacks.

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Skittish Canadians

That skittishness is just not essentially unfounded, Francq stated.

“One of the primary challenges is concerns around data privacy and security,” he stated. “AI is very much about trust, and trust and data cut across everything from security to data analytics to privacy to ethics.”

Another fear tied to the adoption of AI is the potential for job disruption.

Future Skills Centre, a analysis institute based by the Government of Canada’s Future Skills Program, predicts 22 per cent of jobs are at high risk of being automated.

Saarenvirta acknowledges the affect his providers have on the folks working at corporations he companions with.

“My experience, every client we do it at, we get violent pushback from the people who want nothing to do with it because they see the writing on the wall,” he stated. “Not that our goal is to replace people, I don’t want to do any such thing, that’s just a reality of the technology.”

Romano thinks AI adoption may have a direct affect on sure jobs however will open doorways for brand new sorts of jobs.

“If you’re in a role where it’s a highly repetitive manual process that has been screaming for automation for a while, there will be vulnerabilities,” Romano stated. “But education is one of the primary gaps we have here. People aren’t afraid of it, they just have no idea how to use it, and how to benefit from it.”

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Francq thinks this disruption will solely re-emphasize the necessity for critical investments in expertise coaching.

“You can have the greatest ideas, the greatest technology, even the greatest government framework for adopting AI,” Francq stated. “But unless you have the workforce of the future to implement it and adopt it and apply it, you’ll be dead in the water.”

Until all these bins might be ticked off, Canada’s productivity fee could proceed to face challenges.

The Bank of Canada says the nation lags in investments for mental property, equipment and gear and expertise coaching for a rising labour drive.

Canada is the second-least productive nation within the G7, with productivity development of simply 0.9 per cent within the final 10 years, in keeping with the Canadian Chamber of Commerce.

“The last 10 of 12 consecutive quarters we’ve actually seen productivity decline, our productivity levels haven’t been this bad since the 1990s recession,” Gill stated. “We’re now in a situation where you’ve got our central bankers, not known to be alarmists, calling this an emergency situation.”

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The International Monetary fund predicts Canada’s GDP per capita for 2024 will develop by 1.4 per cent, in comparison with 2.1 per cent for the United-States.

Without incorporating synthetic intelligence, the nation could have bother reversing these tendencies.

“Firms and other organizations that are innovative or that figure out how to innovate and adopt emerging technologies will be more competitive and will position themselves for growth in the future,” Francq stated.

• Email: jgowling@postmedia.com

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