Productivity gains resulting from the adoption of generative artificial intelligence will materialise more quickly than they did following the emergence of previous general-purpose technologies, attendees at the Bermuda Risk Summit heard.

Frank Schmid, the chief technology officer at Gen Re, said previous examples of general-purpose technology include the steam engine, electricity, and the semi-conductor to enable electronic computing.

Generative AI is a branch of artificial intelligence that focuses on generating new data based on existing data.

Dr Schmid said: “The arrival of such a technology is a rare event, even in modern times. It happens only in long intervals.”

He added: “It’s like we just invented electricity or the electric motor. This is where we are with this technology.

“The adoption of such a general-purpose technology takes time – and it takes time for the productivity benefits to materialise.”

He said general-purpose technology had three defining characteristics – it is widely used, it is capable of ongoing technical improvements, and it enables innovation.

Dr Schmid added that the technology spawned a feedback cycle between the improvements of the technology and downstream innovation – and that cycle continued over a long period of time.

Dr Schmid said: “There will be a productivity boom in our economies as this technology is adopted. Now, it doesn’t happen immediately.

“With the electric motor, which was invented in 1890, it took about 25 years for the productivity boom to arrive in the United States.

“For the personal computer, which was invented in 1981, it took about 15 years, so expect this time lag to be shorter for Gen AI, but don’t expect this to be immediate.

“But we can expect that there will be a productivity boom, gross domestic product growth, in the countries that are first to adopt this technology and have the most use cases.”

Dr Schmid said lessons could be learnt by studying the arrival of previous iterations of general-purpose technology, including their effect on labour.

“General-purpose technology, when it arrives, will give rise to a lot of automation because that is the idea. Think of the steam engine, electricity ... a lot of automation.

“Now, automation is not synonymous with substitution of labour.

“Automation actually has two effects on labour – one is substitution, clearly it will substitute individual tasks that we perform now, that humans perform, and will be performed by Gen AI.

“Usually, it is not a wholesale replacement of jobs – it is more like certain tasks being performed by the technology, so there is going to be a fair amount of substitution – and it is important.

“But the other thing that is happening, and that’s the more important part, is actually augmentation -- the augmentation of human skills, meaning it enhances your skill set, it complements your skill set.

“That’s what has actually generated the most benefit in the history of adoption of general-purpose technologies.”