Has AI Improved Economic Productivity Yet?

This week, I studied US government statistics about worker productivity to look for clues on how people can benefit from AI.

Here’s what I learned.

In 2023, after a full year of ChatGPT, AI art, and other AI advancements, the US economic productivity growth rate was only 1.4%. This productivity growth was still well below the historical 2.1% average since WW2 (the 1947–2018 long-term average per the Bureau of Labor Statistics).

For some businesses, 2023 was the “year of productivity” by reducing headcount and transitioning to AI. Overall the economy saw productivity growth rebound to 1.4% in 2023, but it’s only in comparison to the down year in 2022 where productivity growth was negative 1.9%.

Labor productivity is the amount of products and services produced by each hour of labor. Productivity is boosted by investments in skills, machinery, and other factors of efficiency like better management practices and government regulations.

In theory, AI tools should directly boost productivity, and also accelerate education for worker skills to indirectly increase productivity.

However, the recent “AI-powered everything” haven’t brought the US back to the post-WW2 historical productivity growth averages yet.

What actually boosted economic productivity in the past?

• The interstate freeways and airlines in the 1950s and 1960s connected people and places physically closer together.
• The internet boom in the late 1990s to early 2000s connected even more people and information digitally closer together.

But, we still haven’t yet seen recent generative AI deliver the same level of productivity boost for the economy.

Perhaps the path to boosting economic productivity should be by connecting people together, as did the travel boom starting in the 1950s and the internet boom starting in the 1990s.

So far, AI has a tendency to separate people from other people instead.

Real economic opportunities come from connecting real people together.

If society can use AI to better able to connect all types of people together, just imagine the potential economic benefits that it can unlock for all people.

Best regards,

Jimmy

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Jimmy Wong Coach, speaker, and entrepreneur enabling people to thrive in the age of AI. Data science leader with 12 years experience at the LinkedIn company and 27 years in the industry. Visit aijimmy.com​ ​​​​​​

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