Does AI actually boost productivity? evidence is murky – The Economic Times

There’s been a lot speak lately – particularly amongst politicians – about productiveness. And for good purpose: Australia’s labour productiveness progress sits at a 60-year low.

To handle this, Prime Minister Anthony Albanese has convened a productiveness spherical desk subsequent month. This may coincide with the discharge of an interim report from the Productivity Commission, which is taking a look at 5 pillars of reform. Considered one of these is the function of information and digital applied sciences, together with synthetic intelligence (AI).

This will likely be music to the ears of the tech and enterprise sectors, which have been enthusiastically selling the productiveness advantages of AI. In actual fact, the Enterprise Council of Australia additionally mentioned final month that AI is the only best alternative in a era to carry productiveness.

However what do we actually learn about how AI impacts productiveness?

What’s productiveness?

Put merely, productiveness is how a lot output (items and providers) we will produce from a given quantity of inputs (corresponding to labour and uncooked supplies). It issues as a result of greater productiveness sometimes interprets to the next lifestyle. Productiveness progress has accounted for 80% of Australia’s revenue progress over the previous three many years.

Productiveness may be regarded as particular person, organisational or nationwide.

Your particular person productiveness is how effectively you handle your time and assets to finish duties. What number of emails are you able to reply to in an hour? What number of merchandise are you able to examine for defects in a day?

Organisational productiveness is how properly an organisation achieves its objectives. For instance, in a analysis organisation, what number of top-quality analysis papers are produced?

Nationwide productiveness is the financial effectivity of a nation, usually measured as gross home product per hour labored. It’s successfully an combination of the opposite varieties. However it’s notoriously troublesome to trace how adjustments in particular person or organisational productiveness translate into nationwide GDP per hour labored.

AI and particular person productiveness

The nascent analysis inspecting the connection between AI and particular person productiveness reveals combined outcomes.

A 2025 real-world research of AI and productiveness concerned 776 skilled product professionals at US multinational firm Procter & Gamble. The research confirmed that people randomly assigned to make use of AI carried out in addition to a staff of two with out. The same research in 2023 with 750 consultants from Boston Consulting Group discovered duties had been 18% sooner with generative AI.

A 2023 paper reported on an early generative AI system in a Fortune 500 software program firm utilized by 5,200 buyer help brokers. The system confirmed a 14% improve within the variety of points resolved per hour. For much less skilled brokers, productiveness elevated by 35%.

However AI would not all the time improve particular person productiveness.

A survey of two,500 professionals discovered generative AI really elevated workload for 77% of employees. Some 47% mentioned they did not know find out how to unlock productiveness advantages. The research factors to limitations corresponding to the necessity to confirm and/or right AI outputs, the necessity for AI upskilling, and unreasonable expectations about what AI can do.

A current CSIRO research examined the day by day use of Microsoft 365 Copilot by 300 workers of a authorities organisation. Whereas the bulk self-reported productiveness advantages, a sizeable minority (30%) didn’t. Even these employees who reported productiveness enhancements anticipated higher productiveness advantages than had been delivered.

AI and organisational productiveness

It is troublesome, if not not possible, to attribute adjustments in an organisation’s productiveness to the introduction of AI. Companies are delicate to many social and organisational components, any one in all which could possibly be the explanation for a change in productiveness.

However, the Organisation for Financial Co-operation and Improvement (OECD) has estimated the productiveness advantages of conventional AI – that’s, machine studying utilized for an industry-specific process – to be zero to 11% on the organisational stage.

A 2024 abstract paper cites unbiased research displaying will increase in organisational productiveness from AI in Germany, Italy and Taiwan.

In distinction, a 2022 evaluation of 300,000 US corporations did not discover a important correlation between AI adoption and productiveness, however did for different applied sciences corresponding to robotics and cloud computing. Seemingly explanations are that AI hasn’t but had an impact on many corporations, or just that it is too laborious to disentangle the impression of AI given it is by no means utilized in isolation.

AI productivity will increase may typically be masked by further human labour wanted to coach or function AI techniques. Take Amazon’s Simply Stroll Out know-how for outlets.

Publicly launched in 2018, it was supposed to cut back labour as buyer purchases could be totally automated. However it reportedly relied on hiring round 1,000 employees in India for high quality management. Amazon has labelled these stories “inaccurate”.

Extra typically, take into consideration the unknown quantity (however probably hundreds of thousands) of individuals paid to label information for AI fashions.

AI and nationwide productiveness

The image at a nationwide stage is even murkier.

Clearly, AI hasn’t but impacted nationwide productiveness. It may be argued that know-how developments take time to have an effect on nationwide productiveness, as firms want to determine find out how to use the know-how and put the required infrastructure and expertise in place.

Nonetheless, this isn’t assured. For instance, whereas there’s consensus that the web led to productiveness enhancements, the results of cellphones and social media are extra contested, and their impacts are extra obvious in some industries (corresponding to leisure) than others.

Productiveness is not simply doing issues sooner

The widespread narrative round AI and productiveness is that AI automates mundane duties, making us sooner at doing issues and giving us extra time for artistic pursuits. This, nevertheless, is a naive view of how work occurs.

Simply because you’ll be able to cope with your inbox extra shortly doesn’t suggest you may spend your afternoon on the seaside. The extra emails you hearth off, the extra you may obtain again, and the unending cycle continues.

Quicker is not all the time higher. Generally, we have to decelerate to be extra productive. That is when nice concepts occur.

Think about a world during which AI is not merely about dashing up duties however proactively slows us down, to offer us house to be extra revolutionary, and extra productive. That is the true untapped alternative with AI.