It is often said that artificial intelligence is very important for economic growth. Although this statement is intuitive, it does not have much data support. A recent study by economists at the Massachusetts Institute of Technology and the University of Washington in St. Louis provides some evidence of how AI tools can facilitate transactions by allowing sellers to cross language barriers.
After studying some of the data on eBay, the researchers compared sales between the US and Spanish-speaking Latin American countries before and after the platform introduced artificial intelligence translations for the product list in 2014. (Specifically, AI translates the title of the list and search queries, and does not translate the product description.)
Prior to this, eBay provided automatic translation, but the use of AI significantly improved the accuracy of the translation. Their data shows that after the launch of the tool, US sales to affected countries increased by 10.9%. The researchers also estimate that the introduction of artificial intelligence translations between countries is equivalent to a 26% reduction in the distance between each other (a factor that has a significant impact on trade volume).
The economists behind the study also looked at AI translations for French, Italian and Russian. Not surprisingly, they found similar results. At the same time, the researchers considered mitigating factors. They include the length of title and marketing spend.
Back in 2014, when eBay added AI translation feature, we had guesses it will help the platform in selling more. It makes sense that when people have access to more accurate translations, it’s easier for them to conduct business with folks in other countries. By the way, Google has released a translation tool as well. It is even more powerful and has “significantly improved translation quality”. This is related to the fact that it looks at the context of entire sentences instead of simply converting individual words into another language.
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