Royal Bank of Canada report urges Canadian businesses to embrace AI to bridge the economic productivity gap with the U.S., citing a potential $180 billion boost by 2030.
Canada's economy is facing challenges compared to the United States, and a recent report from the Royal Bank of Canada suggests that embracing generative artificial intelligence (AI) could be the key to catching up. According to the report, generative AI has the potential to increase Canada's economic output by $180 billion annually by 2030. However, a large majority of Canadian businesses, around 73 percent, have not yet considered using AI, as revealed by a recent survey.
The report points out that many important Canadian industries, like natural resources, have been slow to adopt AI technologies. This delay is partly due to the high costs involved, which pose a significant barrier for small businesses. Nearly all Canadian companies, 98 percent of them, are small businesses with fewer than 100 employees.
One of the reasons behind Canada's lower productivity compared to the U.S., where each worker produces more per hour, is the dominance of public-sector industries like healthcare and education. These sectors have been slower to implement AI advancements compared to other industries.
Despite Canada's strong reputation in AI research and being home to leading AI institutes globally, there's been a gap in translating these advancements into practical applications. The report highlights that while Canada excels in generating ideas and developing AI models, it has not effectively put them into practice across various sectors of the economy.
The Royal Bank of Canada advises that businesses and government bodies should start experimenting with AI on a smaller scale before committing to large-scale projects. This incremental approach allows organizations to address practical challenges first, build confidence in AI technologies, and then expand its use to more transformative projects.
In conclusion, Canada faces an opportunity to significantly enhance its economic performance by embracing generative AI technologies. By overcoming initial barriers and starting with smaller, manageable AI projects, Canadian businesses, and public sectors can pave the way for broader adoption and increased productivity.
