Q24N — In recent years, generative artificial intelligence (generative AI) has become one of the technological trends that has stood out the most for its rapid evolution and ability to transform industries around the world; by the end of the decade, it is estimated that 50% of the activities that represent the workforce in the world could be automated.
In the Central American region, this technology has immense potential to transform and accelerate sectors such as finance, agriculture, the business process outsourcing industry (i.e., outsourcing of back-office operations), and more. Even, according to the McKinsey Global Institute, Generative AI has the potential to generate between 2.6 and 4.4 trillion dollars annually to the world economy in the coming years, which is equivalent to between 5 and 10 times more than the GDP of all of Central America.
It is clear that the benefits and uses of artificial intelligence have captured the interest of business leaders around the world, generating a dramatic increase in its adoption (especially in organizations) in the last year. According to a recent survey conducted by McKinsey to more than 100 organizations with more than 50 million dollars in annual revenue, 63% of respondents say that implementing Generative AI is one of their main priorities; however, 91% indicate that they do not feel “prepared.”
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Despite the challenges and risks associated with Generative AI, the consultancy analyzes the impact and areas of focus so that organizations in the Central American region can take advantage of the potential of this transformative technology in a fast, sustainable and responsible way.
Generative AI: Transforming Central America’s Workforce and Productivity
By increasing worker productivity, increasing their skills and creating new opportunities for innovation and growth, Generative AI could add between US$20 and US$30 billion annually, or around 5% of the region’s GDP, to the Central American and Caribbean economy by 2030, according to McKinsey.
So, how can companies in the region capture the value of this technology? For the consultancy, these are some key points that business leaders should take into account:
Increasing worker productivity. By automating and/or assisting repetitive and tedious tasks, Generative AI has the potential to significantly influence worker productivity and free up time for more complex and creative tasks. It is estimated that 65% of work activities are exposed to some degree of automation by this technology.
For example, a leading bank in the region managed to increase the productivity of its developers by 40% thanks to the use of Generative AI tools, accelerating their time-to-market and their capacity for innovation. Similarly, several contact centers worldwide are achieving productivity improvements of 15% by using “virtual copilots” that use this technology to help telephone agents respond to customer requests during calls.
Increasing worker capabilities. Generating ideas and solving problems are some ways in which this technology will not only increase productivity, but also improve the quality of some tasks.
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In the agricultural sector, for example, Generative AI models will be able to analyze data on soil composition, weather patterns, and crop characteristics, thus providing valuable information to farmers on optimal planting strategies, irrigation techniques, and pest control.
Creating new opportunities. In addition to generating substantial improvements in the way people work and in their productivity, this technology will create new opportunities for innovation and growth in the region, allowing the creation of new products and services, addressing problems that were previously very difficult to overcome.
For example, in the financial sector, Generative AI can improve risk models, allowing unbanked people to join the financial system. Or in education, it can facilitate the creation of interactive and personalized educational materials, increasing access to education throughout the region.
Challenges and risks of Generative AI
Although Generative AI offers enormous potential, its application in Central America faces several challenges and risks that must be carefully addressed.
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By 2030, millions of workers in the region will probably have to change occupations or roles, with those related to office support and customer service being the most impacted by this technology.
At the same time, new types of demand will be generated in the labor market in fields such as rapid engineering, data engineering, and data science.
Movements in the workforce and changes in talent requirements pose a major challenge in Central America, where less than half of the population has
sufficient knowledge to use computers for basic professional tasks with low adoption rates for virtual tools. For McKinsey, it is important that the region proactively address this risk by investing in training and capacity building programs to prepare the workforce for this transition.
At the same time, regional companies still face challenges related to the availability, capacity, and quality of data, in addition to the lack of adequate information systems to produce accurate and reliable results. Therefore, large investments and efforts will be necessary to ensure the availability of diverse and representative data sets needed.
On the other hand, the ethical implications of privacy and biased models, the lack of clarity of responsibility and accountability, the infringement of intellectual property, or even the creation of highly realistic but false content, pose significant risks, so it is necessary to develop robust and clear mechanisms to address them responsibly.
For Central America, this step is crucial since most organizations are still maturing their data governance and artificial intelligence models.
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