The end of the year is a time for a bit of philosophising, reflecting on history and where we are going in the years ahead.
This year has been dominated by the rise of artificial intelligence (AI), which is becoming the latest field of struggle for leadership between the United States and China. Laymen such as myself dabble in using different models, such as ChatGPT, DeepSeek, Gemini, Perplexity and Qwen. Other than doing basic research and helping to collate larger data sets to extract new insights, how is AI transforming the economy, finance and society as a whole?
I have always been somewhat sceptical of futurologists. It’s not wrong to think about the future because we look to history to try and explain the present, projecting incomplete trends into the future. However, reality is the result of the interaction of so many complex factors that seemingly random events, which Nassim Nicholas Taleb termed “black swans”, can throw our best projections into the rubbish heap of failed theories. There is now a widely shared belief that technology is the solution to all our problems, but every solution brings new problems and challenges.
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How is technology changing the global economy? The UN trade body Unctad’s Technology and Innovation Report 2025 explored how inclusive AI can help development. As its secretary general, Rebeca Grynspan, said, “History has shown that while technological progress drives economic growth, it does not on its own ensure equitable income distribution or promote inclusive human development.”
Unctad projects that frontier technologies such as AI, the Internet of Things and semiconductors will grow sixfold from US$2.5 trillion in 2023 to US$16.4 trillion by 2033. Market power, research and development investment, knowledge creation and deployment of these technologies are dominated by technology giants from developed countries. China and the US lead in knowledge generation in frontier technologies, with a growing AI-related or tech divide between developed and developing countries. The more developing countries fall behind, the more they will be marginalised in income and well-being.
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McKinsey has projected that generative AI can raise annual US labour productivity by 1.5 percentage points over 10 years and add US$2.6 trillion to US$4.4 trillion in value annually to the global economy. That also implies that emerging markets are able to adopt these technologies quickly so they can catch up.
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China creates analogue AI chip said to be 1,000 times faster than Nvidia GPU
China creates analogue AI chip said to be 1,000 times faster than Nvidia GPU
