AI Will Improve Productivity, But That is Not the Biggest Possible Change

Many would note that the internet impact on content media has been profound, boosting social and online media at the expense of linear formats. And it seems fair enough to argue that artificial intelligence might deepen that trend. 

One example is the possible impact on “clicking of links” as a platform for monetizing advertising. If AI summaries to direct questions are possible without the need to scroll entries and click on links, traffic volume for media content sites could--and should--drop. To the extent that traffic drives monetization opportunities, AI could be--or will be--yet another obstacle to legacy media monetizing digital content. 

At least, that is what some news content providers already believe, based on new initiatives by Alphabet to embed artificial intelligence into virtually all products and processes, including search. 

At a high level, it is possible to note that many important technology innovations, ranging from personal computers and software to cloud computing and use of the internet, arguably boosted worker productivity, but might not have disrupted whole industries. 

In other cases, widespread disruption did occur, as with social media, targeted advertising and e-commerce disrupting a range of legacy industries and business models. 

The issue now is how artificial intelligence might affect productivity and disrupt industries. The current expectation is that applied AI will boost productivity in a number of ways, across a number of business processes. 

As important as that might prove to be, those effects might be surpassed if AI allows some new business models to develop and provides substitute value for existing processes and industries. 

It is conceivable that a great amount of “advice” or “development” functions--financial, legal, marketing, sales, customer service, product development, software coding--could substantially use AI to displace human-dispensed experts. 

For example, some products now too expensive to provide to small and medium businesses might be possible using AI. Some consumer products that require substantial human labor might be automated to a greater extent, allowing new products to displace existing offers, especially for products with high intangible value. 

The forerunners are the ways media content and business models changed when content could be created and delivered digitally, rather than using physical media. Similar impact can be seen in use of internet retailing rather than “bricks and mortar” stores. 

The use of search to displace many physical operations (trips to the library, reading books, interviewing subjects, comparing products, purchasing products or any related information gathering) provides other examples. 

So the issue is determining when AI is helpful in the sense of possibly improving productivity, which might provide incremental benefits that are hard to quantify, from enabling the creation of whole new industries, firms and value, which might displace existing means of satisfying needs and wants. 

 

Category	Innovation	Impact	Example
Increased Productivity	Personal Computers	Increased efficiency in data processing, communication, and document management.	Faster report generation, improved collaboration, streamlined workflows.
Increased Productivity	The Internet	Enhanced communication, information sharing, and remote work capabilities.	Global teams, real-time updates, access to vast data resources.
Increased Productivity	Internet-based Software (e.g., Cloud Storage)	Reduced hardware costs, improved scalability and accessibility of applications.	On-demand storage, remote access to software, easier collaboration on projects.
New Industries & Business Models	Search Engines (Google)	Created a new industry for information retrieval and online advertising.	Revenue through targeted ads, user data monetization.
New Industries & Business Models	E-commerce (Amazon)	Revolutionized retail by enabling online shopping and global marketplaces.	Direct-to-consumption model, subscription services, logistics networks.
New Industries & Business Models	Social Media (Facebook)	Established new communication channels and platforms for brand marketing and social interaction.	User-generated content, targeted advertising, data-driven marketing strategies.

Higher productivity is a good thing. Creation of whole new industries, and the disruption of legacy industries, might well be the bigger change. 

Word processing was a huge and important aid to those of us working as journalists. Spreadsheets helped analysts build forecasting models faster. Databases helped people categorize knowledge. Search changed the quality, quantity and speed of research many of us could conduct. 

But search, e-commerce and social and digital media created whole new industries, some new business models and often led to the sunsetting of legacy industries as well. 

Today, we mostly are at an early stage of applying AI to every process, and the results will vary, ultimately. What we also might expect--in at least a few cases--is wholesale innovation and economic disruption at the “industry” level, eventually. Content and commerce provide the historic examples.