A study estimates that artificial intelligence will increase productivity in Europe by up to 0.6%

The world is aging . Although the increase in life expectancy has slowed down in the last decade - between 2013 and 2023 it has not even reached a full digit in Spain, where it has gone from 82.8 to 83.7 years - the considerable number of elderly people in the country is putting pressure on the welfare accounts of the public system and stressing the labour market, which offers little and demands a lot from the youngest . Two knots that complicate the desired economic growth required to maintain the welfare state, and which obsesses all countries equally. But a new element has burst into this panorama: artificial intelligence (AI). And some believe that precisely generative AI, that with the capacity to create , is going to be a partial remedy to the demographic problem.

Even though many leaders see immigration as a source of problems , the value of labor and the accounting push of migratory flows is unquestionable. And it is in combination with AI, according to the latest study presented this Wednesday by Arcano Research, the only way to revitalize advanced economies. According to the calculations of the consulting firm, generative artificial intelligence could increase productivity growth by 0.6% in Europe, and up to 0.9% in the US.

The report, entitled Will IAG change immigration patterns in the West? and prepared by the analysis unit of the investment firm Arcano Partners, analyses the impact that new technology could have on hours worked and on productivity per hour worked. Both variables are considered essential to assess the performance of the economy in a context of “weakened growth” in which “the upward pressure of public spending (pensions, health and defence) could lead to future fiscal crises if additional sources of growth are not obtained.”

Among these sources, the report highlights immigration, “which has continued to grow in Western countries since the 1960s and 1970s” and which “has already reached 9% of the total population of the European Union, and 14% in the United States.” It also incorporates the productive capabilities of generative AI, which it defines as “a possible catalyst for growth.”

The study —signed by Björn Beam, an expert in geopolitics and technology; Leopoldo Torralba, director of analysis at Arcano Economic Research; and Pedro Larrasquitu, an economist at the firm— revolves around two premises: the capacity of immigration to stimulate growth, and the new possibilities offered by the latest technological advances. To the point that, in a future simulation, and adding the projections of both circumstances, it raises the impact on European accounts by up to 2% for the coming years, and 1% for the United States. “A future without immigration is difficult to imagine, due to trends in countries of origin and because economic growth will continue to require labor, which is currently limited in the West,” warn the authors.

The progressive ageing of the world is compounded by the continuing decline in the working-age population, closely linked to the birth rate, which, with a few exceptions - such as the baby boom after the Second World War - has also seen a continued decline in developed countries. Due to the combination of all these phenomena, the forecasts for the evolution of working hours "indicate a debacle", the text states, which justifies the slowdown in the economy. It is at this point that the study emphasises the need to find new ways to increase the GDP of countries in order to cope with the high public expenditure that will be required to care for the older part of the population.

However, the measurements carried out by the authors show that in emerging countries such as Africa, for example, where birth rates are still higher than in the West, these labour markets will not be able to offer employment to the entire young population, and therefore, they will be forced to emigrate. Thus, the report conveys to countries the need to confront these migration routes and to evaluate, based on the different social tensions associated with these movements, the suitability of applying them in different ways.

General purpose

In its more technical section, the report includes generative artificial intelligence within the “general purpose technologies”, which are those that boost aggregate growth and therefore have the capacity to “radically transform entire economies and societies”. The text points out that throughout history, 24 technologies of this type have been recorded (such as the appearance of fire, writing, printing or the internet) and that generative AI is the latest to join the list.

However, measuring their impact means addressing the different predictions made by experts, which do not always coincide. Despite this, it is unquestionable for all of them that the ability to change the work paradigm will depend on the tasks assigned to these technologies and, consequently, the disappearance of certain jobs.