24.03 Liontrust Global Innovation Report - The Rise of AI 04.24 - Flipbook - Page 18
The new technology cycle
We expect the AI-driven technology and innovation cycle that has just begun to be a
particularly strong one for stock returns for the companies that can harness AI. This is
because, as we detail below, we believe AI is a particularly powerful technology in terms
of its value creation and capture credentials.
Furthermore, AI is standing on the shoulders of giants in terms
of previous recent major technologies, namely the internet
(breakthrough 1995), smartphones (breakthrough 2007) and
cloud (breakthrough 2012), which have driven very strong growth
of the digital economy over the past quarter of a century: 825%
cumulative growth in GDP of the digital economy between 1997
and 2022 compared with just 73% for the overall economy during
the same period.
AI is a game changer
Growth of digital versus total economy 1997–2022 (US)
900%
800%
Digital Economy
825%
Total Economy (GDP)
700%
600%
500%
400%
300%
200%
73%
100%
0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Game changing technology and key breakthrough year
Internet
Smartphone
Cloud
AI
19 95
2007
2 012
2022
AI built on and enhances value of previous three game changers
Source: Bureau of Economic Analysis, data as at 15.02.24.
This is important because leveraging these existing powerful
technologies means that the productivity gains from AI could come
quicker than from previous major technologies such as steam and
electricity (which took decades to generate strong broad-based
18 - The rise of AI: Technology and Innovation Report
productivity gains), and could be larger given the potential to
unlock as yet untapped value from these three previous giant digital
breakthroughs.
