AI’s Role in Resetting Productivity Baselines

What If scenarios are powerful tools to challenge business assumptions. Scenarios force leaders to prepare for how external forces and technological advances to shape your business. My friend Amy Webb at the Future Today Institute anchors their vision of 2025 and beyond on a Technology Supercycle. This “perfect storm of innovation”—centered around AI, biotech, and sensors—promises to transform industries and redefine productivity, according to Webb.

Explore their research in their 2024 Annual Letter. While the AI debate may dominate your holiday party conversation, I want to focus on AI’s potential impact on productivity, specifically Gross Domestic Product (GDP)—the value of goods and services produced over time.

Productivity Measures

Studies on AI's influence on productivity are proliferating, with productivity predictions range from 10% to 60% gains (Peng, co-pilot developer). However, the 2023 Stanford HCI and Erik Brynjolfsson study offers a grounded perspective, reporting a 14% productivity boost in a real-world business using chatbots for customer service. This aligns with broader trends like task automation, task complements, orchestration via agents, and new tasks (e.g., drug modeling and biowarfare mitigation).

Now to apply specific productivity tasks to GDP, I turn to Daron Acemoglu at MIT for a pragmatic take. In his May 2024 paper, The Simple Macroeconomics of AI [PDF], he estimates annual productivity gains from AI at 30%—extending the Stanford study's findings.

Goldman Sachs provides a framework to connect these insights with GDP growth. Their report projects global GDP growth of 2.7% year-over-year in 2024, compared to 2.2% for the U.S., 4.2% for China, and 1.4% for the EU. Might EU productivity be linked to the misguided objectives of GDPR?

The Takeaway?

AI will reset GDP baselines across industries. Businesses must adjust assumptions, recognizing that the longstanding productivity baseline of 2% could shift to 2.5% or higher in the out-years, depending on the sector.

This evolving baseline demands strategic adaptation. Is your business ready to leverage AI to meet and exceed the new productivity standards? Bring this data to the next What If session you host.

Share your perspective in the comments.

Citations

2023 Byrnjolfsson study: https://siepr.stanford.edu/news/generative-ai-boost-can-boost-productivity-without-replacing-workers](https://siepr.stanford.edu/news/generative-ai-boost-can-boost-productivity-without-replacing-workers)

2023 Peng "The Impact of AI on Developer Productivity: Evidence from Github Copilot" https://arxiv.org/abs/2302.06590](https://arxiv.org/abs/2302.06590)

2024 Acemoglu: "The Simple Macroeconomics of AI" https://economics.mit.edu/sites/default/files/2024-05/The%20Simple%20Macroeconomics%20of%20AI.pdf