For all the noise about AI and its supposed high impact on business, the reality showing up in real-life research is showing more complicated.
Last week, we wrote about Workslop, the problem of shoddy AI-generated work which costs employers and employees considerable time and effort to cleanup.
This week, let’s consider what the research says about AI and productivity. In an article in Fortune, it’s reported that “a study published in February by the National Bureau of Economic Research found that among 6,000 CEOs, chief financial officers, and other executives from firms who responded to various business outlook surveys in the U.S., U.K., Germany, and Australia, the vast majority see little impact from AI on their operations.” The author goes on to say that “nearly 90% of firms said AI has had no impact on employment or productivity over the past three years, the research noted.”
Fortune connects this to what is called Solow’s production paradox, the early computer phenomenon in which production slowed as computers were introduced into business. Solow once said, “you can see the computer age everywhere but in the productivity statistics.” This seems to be what we are seeing and experiencing in the AI age.
Why AI Isn’t Boosting Productivity (Yet)
Consider a couple of reasons for this. First, of course, creators of AI models have a significant financial interest in pushing the AI boom. But the vast promise of how these engines will impact SMBs, in particular, is a far cry from reality, in most cases.
Second, consider the industry in which these AI companies operate and what those folks see every day. That is, AI is exceptionally good at, say, coding. We’ve mentioned the extraordinary (and potentially extraordinarily dangerous) tool recently created by Anthropic. This engine has revolutionary capability…in that field. Creators see this potential and imagine transferring that potential to other industries. Certainly, some of that will come, in certain cases. But it is a vastly different game running a legal firm, regional HVAC company, or local non-profit.
A friend recently told me that he was instructed to begin using an industry-specific AI tool for his job. The reality was that, after all the high-effort investment he put in, the task which he was assigned to automate with AI saved only a few minutes, as the AI output still required significant human oversight.
Another friend mentioned that a previously forthright and direct communication channel became gummed up with fluff and useless explanation when participants started using AI to help generate their responses.
How to Approach AI Without Wasting Time
Yes, eventually, AI will likely boost your business’s productivity. It’s possible it can do some of that now for your situation. You need to research what tools would be helpful, provide training and some sandbox time, and decide on clear measurable outcomes if you plan to incorporate a tool. A tool like MS Copilot takes less time and effort to utilize, and your team should be investigating ways it can help in your daily duties.
But the promise that agentic AI that will revolutionize your business, replace all your people, and send your productivity soaring is, as of now, an illusion. In fact, it can be a distraction and drain if your business is overinvested in its use.
The bottom line is that you shouldn’t get worked up by the AI prophets. Find ways to use AI. Prepare for future use of AI. But don’t get distracted right now by the promises of productivity which are not showing up in real business presently.