The opportunities and challenges are enormous. An executive at a Fortune 500 company says his organization conducted a comprehensive review of its use of analytics and found that its employees overall were providing little or no value. Eradicating old software and replacing inefficient human labor with artificial intelligence can yield significant results. But such an overhaul would require major changes to existing processes and would take years, this person says.
There are some early encouraging signs. U.S. productivity growth, which had remained between 1% and 1.5% for more than a decade and a half, increased to more than 2% last year. It likely reached the same level in the first nine months of this year, although a lack of official data due to the recent US government shutdown makes it difficult to confirm this.
However, it is impossible to say how long this rebound will last and what role can be attributed to AI. The effects of new technologies are rarely felt in isolation. Instead, the benefits are cumulative. AI builds on earlier investments in cloud and mobile computing. Likewise, the latest artificial intelligence boom may just be a harbinger of breakthroughs in areas that have a broader impact on the economy, such as robotics. ChatGPT may have gained public attention, but OpenAI's chatbot is unlikely to have the last word.
David Rothman responds:
This is my favorite discussion right now when it comes to artificial intelligence. How will AI impact overall economic productivity? Forget the mesmerizing videos, the promise of friendly interaction and the prospect of agents performing tedious everyday tasks – the real point will be whether AI can grow the economy, and that means increased productivity.
But as you say, it's difficult to determine how AI is influencing that growth or how it will influence it in the future. Erik Brynjolfsson predicts that, like other so-called general-purpose technologies, AI will follow a J curve, which initially sees a slow, even negative impact on productivity as companies invest heavily in the technology before finally reaping the benefits. And then boom.
But there is a counterexample that undermines the “just be patient” argument. IT productivity growth accelerated in the mid-1990s but has become relatively dismal since the mid-2000s. Despite smartphones, social media and apps like Slack and Uber, digital technology has done little to drive sustainable economic growth. There was no significant increase in productivity.
