2024 could be a fitting year for the new cycle of technological advancements experienced since 2011 with the entry of the Fourth Industrial Revolution. The ecosystem created by Artificial Intelligence, Internet of Things and Digitization has reached a new dimension from the end of 2022.
A key moment to enter the collective unconscious is ChatGPT (November 30, 2022) and the emergence of a series of systems or tools like Bart, Jasper, and Paradox that unleash the power to harness big data, programming. and generative artificial intelligence. This article aims to analyze some of the important aspects to watch out for on this front in 2024.
What comes next after the first steps of the Fourth Industrial Revolution?
The Fourth Industrial Revolution should be considered an ecosystem that combines many of the techniques and innovations that emerged from the previous Industrial Revolution with the rise of personal computers and the Internet, automation, and globalization since the 1980s. In the Fourth Industrial Revolution, important processes of digitization, hyperconnectivity and the use of cyber-physical systems have emerged. These have completely changed the way we do business, the way people consume and interact with society and the environment. In general, the use of technological innovations in countless fields has grown exponentially. An example of this is Industry 5.0, a concept recently approved by the European Commission, which focuses on a combination of digital and green transformations that allow the achievement of more sustainable, resilient and people-centric industries.
It is also important to recognize that this recession has had a turning point with the emergence of the coronavirus pandemic. The health crisis we have faced since 2020 has increased the adoption of many technological innovations, creating a digital culture among individuals and organizations.
According to a study by the International Monetary Fund, the acceleration of digital transformation during the pandemic allowed people's productivity to increase by up to 6% in advanced economies. In emerging economies, profits were higher, growing at double-digit rates in some cases. This promotes a virtuous circle by encouraging greater investment in new solutions that allow for the forward exploration of new technological frontiers, and promoting multiple research and development projects by having more diverse and competitive funding sources. Among them, applications of generative artificial intelligence and other branches will improve productivity and open new markets.
Disruptive innovation driven by artificial intelligence
According to ChatGPT's query, “generative artificial intelligence describes the algorithms used to generate new content, including audio, code, images, text, simulations, and videos.” This innovation has the potential to significantly change the way we create content. Other branches of artificial intelligence include machine learning, neural networks, natural language processing, robotics, computer vision, fuzzy logic, and expert systems. This technological force is capable of creating structural changes in our daily lives.
Beyond its potential to boost productivity and human intelligence and creativity, technological progress can also represent an adaptive phase that will create disruption on multiple fronts (E.g employment dynamics, market structures, knowledge gaps, etc.). We may be in a situation that resembles what philosopher Thomas Kuhn describes as a scientific revolution.
This concept refers to a scenario characterized by a significant and transcendental paradigm shift, which cannot be compared to the previous state. As far as the artificial intelligence revolution is concerned, this technological innovation will be so disruptive that it will require rapid absorption, knowledge, flexibility and agility in the face of change in decision makers to avoid failure.
Because of the fear that a large number of trades and professions will eventually be replaced or filled by machines, there is a need to strengthen and adapt educational systems. For example, the IMF estimates that nearly 40% of all jobs in the world could be affected by artificial intelligence. These challenges are compounded by the difficult ethical and safety issues highlighted by some of these technologies, which must be satisfactorily addressed to ensure their penetration and development.
Financial markets have also reacted to this paradigm shift
Investors also recognize the potential of artificial intelligence, hyper-personalization and other technological advances that may be used more frequently in the future. In particular, there has been a surge in demand for financial instruments that benefit from the economic benefits expected from this new paradigm. An example is the strong increase in the stock price (and therefore, market capitalization value) of public companies associated with technology. Such is the case with the acronym “Magnificent 7,” which stands for Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Since at least last year, these companies have been positively surprised by this excitement around artificial intelligence.
Aside from the discussion of price bubbles (which will be the subject of another article), the profit generation of most of these companies, combined with their strategic product development programs, suggests substantial demand for microprocessors, other hardware, systems, and everything else. The development of this new cycle absorbed technological advances. This is a change of trend that may continue for a long time, especially if we take into account that there is a process of proliferation or democratization of the use of artificial intelligence applications among the majority of the population.
A final reflection
The current artificial intelligence revolution is being presented as a very important paradigm shift that will create major changes in all our activities, from the way we conduct business to how our personal relationships occur. In 2024, we could see more penetration and development of artificial intelligence applications that emerged from the end of 2022, and which started to pick up in 2023. This can bring about not only improvements in productivity but also the development of new economic activities and markets.
The potential is enormous and we are only seeing the tip of the iceberg today. While the opportunities are many and varied, there are also challenges in cyber security, socioeconomics, demographics, public policies and income distribution, psychology, etc. Technological progress has always had an element of disruptive innovation, which has led to the search for a more flexible and comprehensive approach. Basically an evolutionary concept, with a meaning Darwinian Adapt or die.
Contact:
Alejandro Padilla is Deputy General Director of Economics and Financial Analysis at Grupo Financiero Banorte. The opinions expressed in this document are the exclusive responsibility of the author and do not necessarily represent the opinion of Grupo Financiero Banorte or its affiliates or subsidiaries.
Twitter account: @alexpadillason
The views expressed are entirely independent of the responsibility and position and editorial line of their authors Forbes Mexico.
Follow Forbes Mexico for information on business and current affairs
