Slow economic growth is a major concern affecting companies’ bottom lines right now, said House of Lords Baroness Dambisa Moyo.
Productivity decline and questions around measurement are a concern, as is the topic of how artificial intelligence may transform how society functions as more people are displaced from their jobs, Moyo said in an interview with CNBC.
“I’m worried in particular because both developed and developing economies are struggling to achieve that 3% per year growth rate, which is required in order to double per capita incomes in a generation. So I think that to me would be the key issue that we need to focus on,” the “How Boards Work” author explained.
That 3% growth in the economy is crucial to improving livelihood.
“The whole hope is that we’re continuing to improve people’s livelihoods and people are able to access opportunities, not just in terms of public goods like education and health care and quality infrastructure, but also being able to improve their livelihoods by access to great opportunities. But we’re not able to deliver on that. Public policy can’t deliver on that and nor can corporations if the economy is not growing,” the House of Lords Baroness said.
Related to the decline in GDP is evidence of lower productivity despite advancements in technology.
“Productivity numbers in the U.S. are in decline year over year and a rough estimate that I go by and a lot of evidence has shown that number is very important, about 60% of why one country grows and another one does not is because of productivity. … I think a lot of that right now, we hope, is chalked up to measurement, meaning that there are new sectors and new jobs and new opportunities and new information platforms that have emerged from technology. And unfortunately, our modeling of productivity and economy have actually not kept up,” she said.
Moyo also stated that AI is fever pitched in every facet of her work as an investor, economist, board member and public policy advisor.
“At the micro level, it could have a meaningful impact not just on business models and how companies constitute themselves and think about allocating resources like capital and labor. But also, I think it could be incredibly transformative for the role of state if indeed we end up with a lot more people who are out of work,” Moyo explained.
Watch the video above to see the full interview.