Will Artificial Intelligence Live Up to its Promise of Driving Strong Productivity Growth?

With the adoption of modern information technologies, our productivity was expected to increase rapidly. Technologists promised turbo-charged productivity with our ability to communicate instantly with co-workers, draft documents and presentation more quickly, and easily access a seemingly endless supply of digital information. However, that has not happened.

A recent commentary by Irving Wladawsky-Berger in the Wall Street Journal’s CIO Journal discussed this so-called Productivity Paradox by examining a working paper from the National Bureau of Economic Research called “Artificial Intelligences and the Modern Productivity Paradox.” The paper’s authors, MIT professor Erik Brynjolfsson, MIT PhD candidate Daniel Rock and University of Chicago professor Chad Syverson, noted that had indeed slowed by half over the last decade, but recent advances in Artificial Intelligence could change that.

The NBER paper and the WSJ commentary concluded that the Productivity Paradox should not be a condemnation of modern advances in AI. Instead, AI is likely the remedy. Here’s how the NBER paper described it:

“Given the proper context, there are no inherent inconsistencies between having both transformative technological advances and lagging productivity. Over the past two centuries we’ve learned that there’s generally a significant time lag between the broad acceptance of new technology-based paradigms and the ensuing economic transformation and institutional re-composition. Even after reaching a tipping point of market acceptance, it takes considerable time, often decades, for the new technologies and business models to be widely embraced by companies and industries across the economy, and only then will their benefits follow, including productivity growth.”

At Kyndi, we are not surprised by these conclusions, especially because AI is still in its early stages of adoption. Our Founder and CEO Ryan Welsh addressed the AI productivity question in a speech last year before a major big data conference. While noting that productivity growth had lagged during the past decade (as detailed in the NBER research paper), Welsh said that AI had the potential of creating significant growth in productivity.

“The fact is, technological advances in AI can help amplify human productivity,” said Welsh. “We have seen that while human output is increasing at a slower rate, machines are becoming more useful tools in the consumption of information. We can add more people to a research project, but they will still only read so fast. However, if you add AI to help those researchers, you can give one analyst the power, speed, and efficacy of four. We believe that AI will have a significant, measureable impact on productivity in years ahead, and that will yield very positive results for people and the global economy.”

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