No Measurable Productivity Boost from Generative AI?

With the caveat that knowledge worker and office worker “productivity” is difficult to impossible to measure, a study by ActivTrak was unable to find evidence of productivity improvements in 2023 due to use of generative artificial intelligence, primarily ChatGPT.

The study suggests that overall productivity increased by about eight minutes from the beginning of 2023 to the end, from all sources. Roughly 22 percent of workers across industries studied used ChatGPT or generative AI. 

  

source: ActivTrak

But the study does not specifically try to evaluate the productivity impact of generative AI. That should not be surprising. 

Though some observers believe AI could produce a startling rate of productivity increase perhaps an order of magnitude higher than what we have experienced in recent decades, there are reasons to believe such forecasts are far too optimistic. 

Knowledge worker and office worker productivity--aside from being tough to measure--has not historically shown high impact from information technology adoption, despite our sense that this should be the outcome. 

Since 1970, the actual impact of IT arguably is rather slight. Productivity growth from all sources--including IT--is on the order of 0.5 percent up to about 1.5 percent per year, maximum, from all sources, including personal computers, the internet, cloud computing, mobile devices, open source and everything else in the information technology field, plus all other influences. 

Industry Sector (NAICS Code)	Description	Percent Change in Labor Productivity (1970-2022)
Total Nonfarm Business (All)	Covers all industries except agriculture, government, and private households	1.0%
GoodsProducing Industries (1133)	Includes mining, construction, and manufacturing	0.4%
Manufacturing (3133)	Factory production of goods	0.5%
Construction (23)	Building, renovation, and maintenance of structures	1.2%
Mining (21)	Extraction of minerals and natural resources	2.3%
ServiceProviding Industries (4892)	Covers a wide range of service businesses	1.4%
Wholesale Trade (42)	Selling goods to businesses in bulk	1.2%
Retail Trade (4445)	Selling goods directly to consumers	0.4%
Transportation and Warehousing (4849)	Moving people and goods	2.1%
Information (51)	Publishing, broadcasting, and telecommunications	2.5%
Financial Activities (52)	Banking, insurance, and real estate	1.2%
Professional and Business Services (5456)	Legal, accounting, consulting, and scientific services	2.0%
Education and Health Services (6162)	Schools, hospitals, and other social services	1.3%
Leisure and Hospitality (7172)	Accommodation, food services, and entertainment	3.9%
Other Services (8189)	Repair shops, personal care services, and religious organizations	0.8%

But impact is likely to be uneven. Keep in mind that GenAI is used to create content. So it is firms in industries that principally “create content” that stand to benefit the most. 

Recent strikes by Hollywood actors and writers illustrate that point. The entertainment media industry--which principally creates content--is among those most exposed to GenAI and most able to use the tools. 

Media also is an industry estimated to have had higher productivity gains in 2022 than most others. Where all “non-farm” industries might have seen an average one-percent productivity gain in 2022, media saw a boost of up to 2.5 percent, according to Bureau of Labor Statistics figures. 

Likewise, firms in the product design business; marketing and advertising; pharmaceutical development and finance industries are among segments that routinely create content as a core function, and might therefore be expected to be areas where GenAI has early impact. 

Professional services might have seen a boost in 2022 productivity of perhaps two percent. 

On the other hand, many industries do not rely principally or even significantly on content creation, and should lag in terms of GenAI producing measurable business results. 

Basic resource extraction, such as mining or forestry should see limited impact, one way or the other. In fact, goods-producing industries tended to see negative productivity growth in 2022. AI might help, but we need to be realistic about the degree of potential change.