AI could bring billions to the German economy

Berlin/Cologne. Systems with generative artificial intelligence (AI) functions could contribute around 330 billion euros to the value creation of the German economy in the future, according to a study. This could be achieved if at least half of the companies used corresponding technologies, is the result of a study by the Research Institute IW Consult commissioned by Google, which was presented in Berlin on Monday. IW Consult is a subsidiary of the Institute of the German Economy (IW) in Cologne.

Generative AI is a variant of Artificial Intelligence that can be used to create ("generate") new, original content. With the help of algorithms and so-called language models, content such as texts, images and videos, but also music or program codes can be generated. The specifications for the AI system do not have to be programmed, but can be transmitted in natural language. As a breakthrough for generative AI, the publication of the chatbot ChatGPT by the start-up OpenAI in November 2022. Google has been offering its own dialog system for generative AI, Bard, for half a year, which competes with ChatGPT.

In the German economy, the potential of artificial intelligence for value creation arises, among other things, from the more efficient use of existing resources, according to IW Consult. The researchers have calculated that in companies, employees could spend an average of 100 hours a year using this technology and the time freed up for more productive activities.

In 2022, the gross value added of the economy in Germany was around 3.5 trillion euros. The IW researchers assume that the growth in AI will offset a shrinkage caused by the shortage of labor, because more people in Germany are retiring than are entering the labor market.

As a starting point for the study, 2,068 companies and 1,012 people in Germany were surveyed on the role of digital applications in operations and everyday life. According to IW Consult, the survey is representative. According to the survey, around 600,000 companies in Germany are already using artificial intelligence. This corresponds to around 17 percent of all companies in Germany.

"In total, there is a possible additional contribution to value creation of 330 billion euros from generative AI," explained Michael Hüther, director of the Institute of the German Economy. This is also necessary, he said, because fewer and fewer workers are available due to demographic developments.

Hüther said it was crucial for the future competitiveness of Germany as a business location to defend and expand its lead in productivity. Currently, the productivity of German industry is on average 14 percent higher than that of its European neighbors. "But in recent years, productivity growth has declined and in some cases even developed negatively in the manufacturing sector. Through consistent use of AI, we have a great opportunity to turn this trend around and get back on a long-term growth path." Hüther warned against excessive regulation, because otherwise a significant part of the productivity gains will disappear again. (dpa)