Brazil can boost GDP by over 7% with full AI adoption, says Microsoft

The technology giant is optimistic about the gains artificial intelligence can bring but warned shortcomings around education need to be addressed.

Brazil could achieve a GDP increase of 7.1% with full adoption of artificial intelligence technologies, according to a study released by Microsoft.

The Impact if AI in the jobs market study was carried out by consulting firm DuckerFrontier on Microsoft's behalf and considers the impact that the technologies can bring to the national economy within the next decade in Latin countries.

The research was published in São Paulo yesterday (11) during the AI+ Tour, an event that the company is staging in eight countries in Latin America.

"We have a unique opportunity to boost the Brazilian economy, achieving high levels of productivity and creating new business through the adoption of artificial intelligence," said Microsoft Brazil president, Tania Cosentino.

"But to ensure the maximum benefit from applying technology, we need to tackle the education challenge," she noted, adding that this would involve improving training for young Brazilians from primary school to university, as well as reskilling professionals that are already in the market.

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"We need to promote professional training on an exponential scale to ensure that our workforce is not affected by the transformation of jobs," Cosentino said.

The findings of the Microsoft study suggest that the predicted increase in GDP considering full AI adoption is higher than the 2.9% growth rate projected by the World Bank and the International Monetary Fund (IMF) until 2030.

According to the research, this GDP growth would be accompanied by a four-fold increase in the country's productivity levels, reaching a compound annual growth rate of up to 7% per year in the period to 2030, compared to the 1,7% annual growth estimated by the World Bank and the IMF.

Simulations in the report consider the sectors of utilities, enterprise services, retail, wholesale, hospitality and food, construction, manufacturing, mining, water and energy, and agriculture and fisheries.

In terms of AI readiness, the study noted that Brazil's current situation can improve to accelerate adoption in relation to other countries in the region, such as Chile, Mexico, and Colombia. While Brazil is well-positioned in terms of its cybersecurity and technological ecosystem, ranking second in both. However, when it comes to human capital and the local innovation environment, the country ranks 7th and 6th, respectively.

When it comes to job creation, if local companies fully adopted AI, the corporate services sector will benefit the most, with 26 million new jobs created, a 103% increase in relation to World Bank and the IMF's figures for the coming decade.

Other sectors that would have significant gains in new job creation would be manufacturing, with a predicted increase of 73% in job creation, as well as retail, wholesale, hotel and food industries (44%), and construction (42%).

The DuckerFrontier research pointed out there will be an overall reduction in workloads due to automation but this would not automatically lead to job losses in all cases, as companies could allocate new tasks to their employees or just reduce their working hours.

In a scenario of maximum AI benefit, demand for highly skilled labor will increase in all sectors of the economy, the report noted, generating 17.7 million extra jobs for skilled professionals.

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