Temperature Check on the Global AI Climate

From boardrooms to classrooms, the conversation around the role of artificial intelligence (AI) is everywhere, involving questions of ethics, labor practices, job elimination and environmental impact. 

A recent study from Digital Planet, an interdisciplinary research initiative of The Fletcher School’s Institute for Business in the Global Context, seeks to shed light on the personal cost of these decisions for individuals and policymakers alike. 

Dedicated to understanding the impact of digital innovations on the world and providing actionable insights for policymakers, businesses, investors and innovators, Digital Planet has published its Digital Evolution Index for 13 years. After studying immense data sets, the research team creates an interactive research platform of scorecards to help decision makers chart “a path toward a data-enabled, artificial intelligence-augmented and inclusive digital future.”

“We’re trying to understand the economic benefits generated by these digital economies and the environmental costs that we have to incur,” said Dean of Global Business Bhaskar Chakravorti. 

Evaluating the current digital climate, the team focused their efforts in the study’s fifth edition on digital inclusion, the digital deceleration since the pandemic and the growth of AI. 

Learning from a Real-World Dataset

The research team behind the Digital Evolution Index has always worked within a framework that studies supply, demand, institutions and innovations. 

“The ingredients within that framework change, so this year, we went out and looked at AI indicators,” said Digital Planet’s Head of Operations Christina Filipovic F14. “How do we capture how AI is changing the nature of the digital economy? How do we define innovation differently, given how important AI is?”

The team combed through a large dataset and created an index that ranks the advancements of 55 countries around the world. 

“The most fun and hardest part is digging into why countries are where they are,” said Filipovic. “We're very lucky to have access to brilliant Tufts and Fletcher students from all kinds of geographic and career backgrounds. We assign them different regions or topics, and they're able to see some trends that we might have missed.”

Iris Niu joined Digital Planet as a research analyst after earning her Master’s of Science in Data Science at Tufts. 

“In class, we study perfect datasets,” she said. “The Digital Evolution Index uses a massive real-world dataset from 125 countries over the last 16 years. I applied some of the very technical skills I learned in my master’s to the research, learning a lot in the process.” 

How AI Transforms the Digital Economy

Curiously, the team found that digital growth decelerated globally after the pandemic.

“There was all this noise in the media about how COVID accelerated digital transformation,” said Filipovic. “Part of that's true, but when you zoom out and look at the strength of institutions when it comes to managing digital development and demand metrics, the growth rates plateaued or dropped in a lot of cases.”

While countries worldwide have made progress on bringing people online by increasing access to smartphones and digital payments, the rate leveled off over the past few years. Those gains slowed most evidently in the Global South and often intersect with gender, urban-rural and socioeconomic divides. The team also uncovered insight on how advancements in artificial intelligence are interacting with these changes.

“If institutions are not improving in their ability to manage digital development, to come up with policies quickly and be responsive to technological change, that's worrisome when we have a technology that everyone is talking about and will change the nature of work and jobs,” said Filipovic. 

Reflecting upon the surge in AI, Chakravorti also noted the significance of two leading countries in the index.

“For the first time since we've been measuring this, the United States took the number one spot in the state of evolution. China is number one in terms of the rate of evolution,” said Chakravorti. “When you look at that economic value, the U.S. and China collectively constitute 54% of the world's digital GDP.”

“These are the two economic and geopolitical superpowers that constitute the majority of the world's GDP in the digital industry,” he added. “That puts this whole future in a really interesting position. China and the U.S. are the two leaders in terms of AI production and development. Politically, the two are at loggerheads, so as we look ahead, it's unclear whether this competition is going to be good or bad for the welfare of others.” 

Measuring the Burn-to-Earn Index

In addition to assessing the geopolitics of digital evolution, the team compiled the so-called “Burn-to-Earn Index” and investigated their findings. 

“We're measuring the ‘burn,’ or the CO2 equivalent emissions that are attributed to the digital economy,” said Filipovic. “On the other hand, we're measuring the ‘earn,’ which is the revenue generated from the digital economy by country. We compare them to see how much value countries are generating from the digital economy.”

“The Burn-to-Earn Index reminds us that not all dollars earned in the digital economy are created equally,” added Abidemi Adisa, a research analyst at Digital Planet. “In the digital age, productivity isn't just measured in dollars earned, but in carbon burned to earn them."

While many people may have heard about the greater environmental impact of using generative AI as compared to a simple online search, Digital Planet wanted to make that impact tangible so that individuals can make more informed decisions. 

“It's like if you order a cheeseburger at McDonald's,” said Chakravorti. “Most of the time you don't think about the calories you're consuming, but if the calories are showing on the menu, you may choose to do things differently.”

“We are putting calories on the menu,” he added. “We're thinking about the world globally. We don't just look at a U.S.-centric or a developed-world centric view. We also look at the world across 125 economies, and we consider all aspects – the technology, the economic impact, the environmental impact and the political impact – a 360 degree view of an increasingly important phenomenon.”

Read more about the Institute for Business in the Global Context and Digital Planet.