Estonia’s Minister of Economic Affairs and Information Technology Tiit Riisalo believes that – “if we are ready” – 8 per cent in the peak year of adoption is achievable. This is approximately equal to the proportions of the gross national product (GDP) currently spent on education and defence combined, meaning that this readiness can bring huge rewards.
Estonia to surf the generative AI tsunami
“Is there potential to be ready?” the minister rhetorically asked in his speech at the Finnish-Estonian Business Forum, last week’s event that this year focused on how artificial intelligence can be used to promote business ties between the two neighbouring countries.
“Of course there is,” Riisalo states. But even with limited adoption, a contribution of 3 to 5 per cent to the GDP can be expected, according to the report.
Riisalo compares the recent rise of artificial intelligence with a tsunami, or a series of ocean waves caused by a sudden and violent disturbance of the sea floor. According to the minister, when such a tech tsunami occurs, countries can either be overwhelmed by the waves or “if we know how to surf and have a surfboard at hand,” we can grab the surfboard and “reach amazing new heights.”
Being ready for generative AI may involve different concepts and solutions. According to the minister, one example of this readiness is being able to exchange information with other countries through the open-source data exchange layer solution, called X-Road. Several other examples are related to data collection and benefitting from the data: Estonia’s genome bank, managing and studying genetic data collected from the Estonian population for scientific research purposes, and the existence of digital medical records. The medical data, together with new technologies, can create unique capabilities that few other countries possess.
Digital disruption ahead
In the future, 61 per cent of Estonia’s workforce is predicted to work together with generative AI. A gradual change will occur, where less than 10 per cent of highly exposed jobs will be replaced by automation. At the same time, new jobs in the AI-powered economy will be created. While the report expects employment levels to stay similar to those of today, a rise in productivity is expected. Referring to previous studies, the report states that for example firm-level AI adoption typically increases productivity by 2-3 per cent.
The report sees the most potential for generative AI in knowledge-intensive business services, related to finance, legal affairs, science and information. Here, generative AI has the potential to contribute up to 0.75 billion euros annually. Equal benefits of 0.5 billion are seen for trade, transport and tourism; public administration and health care; and manufacturing, construction, energy and water sectors. The benefits in agriculture, forestry, fishing, and mining are predicted to be an additional 0.25 billion.
Smart choices needed to excel in artificial intelligence
While in Estonia, as well as the rest of the European Union, small and medium enterprises lag behind in AI adoption, generative AI could boost this. As generative AI helps mitigate the need for large datasets, it is generally easy to use and available online, meaning that huge investments in infrastructure are not needed. Small and medium-sized businesses are essential drivers of economic growth.
But what is needed for all these things to happen? According to the report, investment in artificial intelligence research and development is needed, together with promoting widespread adoption and universal accessibility and building workforce needed by the new situation, including general and targeted upskilling and reskilling.
“What we see is that there is potential for a digital disruption,” the minister concludes.
And not only the government is optimistic about the next steps of Estonia as a digital state. “The crazy days of AI began 500 days ago,” IT visionary and one of the architects of Estonia’s current IT success story Linnar Viik adds. “Since then, the new gold rush is taking place. And the stakes are high!”
Generative AI or generative artificial intelligence is a class of artificial intelligence algorithms designed to generate new, original content based on patterns and data it has been trained on.
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The post Report: Generative AI can boost Estonia’s GDP by up to 8 per cent. Minister Riisalo: potential for digital disruption ahead appeared first on Invest in Estonia.
