Both the opportunities and the challenges abound. An executive at a Fortune 500 company says his organization has conducted a comprehensive review of its use of analytics and concluded that its workers, as a whole, add little or no value. Rooting out old software and replacing that inefficient human labor with AI can yield significant results. But, as the person says, such a revamp would require major changes to current processes and take years to accomplish.
There are some early encouraging signs. U.S. productivity growth, which had been stuck at 1% to 1.5% for more than a decade and a half, rebounded to more than 2% last year. The first nine months of this year probably hit the same level, although it’s impossible to confirm due to a lack of official data due to the recent US government shutdown.
It’s impossible to tell, though, how sustainable this rebound will be or how much can be attributed to AI. The effects of new technologies are rarely felt in isolation. Instead, the benefits compound. AI builds on earlier investments in cloud and mobile computing. Likewise, the latest AI boom may just be a precursor to advances in areas that have a broader impact on the economy, such as robotics. ChatGPT may have captured the popular imagination, but Openei’s chatbot is unlikely to be the last word.
David Rottman replied:
This is my favorite conversation these days when it comes to artificial intelligence. How will AI affect overall economic productivity? Forget about the demolition videos, the promise of companionship, and the prospect of agents doing tedious everyday tasks — the bottom line will be whether AI can grow the economy, and that means increased productivity.
But, as you say, it’s hard to talk about how AI is influencing such growth or how it will be in the future. Erik Brynjolfsson predicts that, like other so-called general-purpose technologies, AI will follow a curve that initially has a slow, even negative, impact on productivity as companies invest heavily in the technology before finally reaping the rewards. And then boom
But there is a counter-pattern that undermines the patient’s argument. Productivity growth was picked up in the mid-1990s but has been relatively modest since the mid-2000s. Despite smartphones and social media and apps like Slack and Uber, digital technologies have done little to generate strong economic growth. Never came across a stronger productivity.