Thursday, March 14, 2024

AI Productivity Gains Might be Hard to Measure

Proponents of applied artificial intelligence generally tout the productivity advantages AI will bring, and with reason. But productivity impact, assuming you believe we can measure it, if the result of many influences. 


The U.S. Bureau of Labor Statistics uses a measure called “Multifaceted Productivity.” It  includes information technology investment, but also advancements in business practices, workforce skills, and other capital investment.


Since 2000, IT investment growth has exceeded MFP growth. 


Year

MFP Growth (%)

IT Investment Growth (%)

2000

2.4

10.2

2005

1.3

7.8

2010

0.8

5.1

2015

0.6

3.4

2020

1.4

4.2

source: Bureau of Labor Statistics


The point is that AI contributions will be hard to identify, in terms of productivity gains.


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