Artificial Intelligence and the Economy: Irish Retail and Hospitality Sector to be Impacted

In an article dated 22 Nov 2017 in the Independent, an Irish newspaper, PriceWaterhouseCoopers (PwC) estimates that over the next twelve years, artificial intelligence (AI) and automation will contribute 48 billion Euros to the Irish economy. By 2030, the contribution is estimated to increase to 11.6% of the Irish GDP. This shift in the economy is expected to impact retail, hospitality and food services sectors the most, followed by the medical and education sectors.

PwC also pointed out while Ireland is poised to compete with other European countries, it still lags behind countries from other regions like the US and mainland China. Initial assessment by PwC indicates employment opportunities will be affected but it is unable to ascertain the extent. It is inevitable AI will replace part of the workforce; however, new opportunities will also be created from changes in productivity and consumer demand. It is estimated that demand for jobs related to the development, maintenance, operation and monitoring of machines related to AI and automation will be on the rise.

PwC’s machine-learning analysis estimates adoption of automation in Irish labor-intensive sectors is likely to be higher than those of other European countries. This is attributed to the back office nature of work that Irish financial services offer. Overall, similar to the UK and other European economies, Ireland does not have a heavy weight of manufacturing activities as part of the economy. Therefore, the impact of AI on Irish GDP will be tilted toward the consumption-oriented sectors compared to economies from other regions. Furthermore, it is noteworthy that while labor productivity increases on the production side, further positive impact in the GDP is expected from the spillover effect of overall productivity increase in other areas of the economy.

Ronan Fitzpatrick, Digital Director of PwC Ireland, contended that AI will bring forth substantial benefits to the Irish economy, albeit possible disruption in productivity. Businesses that fail to adopt AI could find themselves being placed at a severe competitive disadvantage on pricing and turnaround times. Pioneers in the field of science and technology like Elon Musk and Stephen Hawking have warned that while the future of AI machines possibly threatens the current future of humankind, the pace of automation will continue to increase exponentially. For example, Uber has already announced it will purchase up to 24,000 unmanned autonomous vehicles to operate its driverless fleet by 2021.

Source: Economic Division, Taipei Representative Office in the United Kingdom

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