National Economy Minister points to need for promoting use of AI among businesses

National Economy Minister Márton Nagy addressed Tuesday’s Portfolio Finance 2024 conference in Budapest and said the government needed to encourage businesses to use AI (artificial intelligence) to boost local SMEs’ competitiveness.

Nagy said the rapid pace at which AI was advancing would impact businesses’ everyday operations. He added that AI could boost productivity by 26 percent and lift GDP by 15 percent while contributing to the creation of 1 million high-value-added jobs.

Outlining the future impact of AI on the Hungarian economy, Nagy told the conference that the IMF had estimated that 40 percent of workplaces globally would be transformed by the developing technology, while other research suggested AI could add USD 15.7 trillion to the global economy, lifting GDP by 26 percent. Broad adoption of AI could also boost labour productivity, he added.

AI could change the way production chains work, boosting productivity in the food sector through data generated by the Internet of Things, and allowing more effective inventory management in the retail sector, he said.

He added that using AI in the financial sector could increase security, reduce costs, improve customer experience, and automatically flag suspicious transactions.

He acknowledged the risk AI presented to the labour market, mainly to office jobs and positions requiring a high level of qualification, adding that one European survey suggested AI would put 24pc of jobs at risk due to automatisation. Those risks need to be managed in time, he said.