It's common to hear about how AI is going to transform the world and lead us to undreamt of riches. Economists are sceptical. A common view in the US is that AI will, at most, help sustain productivity growth at 2 per cent, it's not going to cause any acceleration. But that doesn't stop the industry types from gushing about AI.
What we can confidently say now is that AI has so far not had any significant impact. And that seems to be because the adoption of AI by industry is quite weak. Meaning to say, businesses have not incorporated AI into their practices in ways that can transform the businesses, as an article in the Economist points out.
I will content myself with reproducing a few points:
Official statistics agencies pose AI-related questions to firms of all varieties, and in a wider range of industries than Microsoft and LinkedIn do. America’s Census Bureau produces the best estimates. It finds only 5% of businesses have used ai in the past fortnight..... Even in San Francisco many techies admit, when pressed, that they do not fork out $20 a month for the best version of Chatgpt.
Concerns about data security, biased algorithms and hallucinations are slowing the roll-out. McDonald’s, a fast-food chain, recently canned a trial that used ai to take customers’ drive-through orders after the system started making errors, such as adding $222-worth of chicken nuggets to one diner’s bill. A consultant says that some of his clients are struck by “pilotitis”, an affliction whereby too many small ai projects make it hard to identify where to invest. Other firms are holding off on big projects because ai is developing so fast, meaning it is easy to splash out on tech that will soon be out of date.
We hear often about AI displacing a range of jobs. This hasn't happened either:
Using American data on employment by occupation, we focus on white-collar workers, who range from back-office support to copywriters. Such roles are thought to be vulnerable to ai, which is becoming better at tasks that involve logical reasoning and creativity. Despite this, the share of employment in white-collar professions is a percentage point higher than before the pandemic..
Will things change with more AI adoption? Will AI adoption happen on the scale projected? We don't know.
1 comment:
Very well put. AI in itself won't do anything, it's when AI is used efficiently by firms to increase productivity and profits is when AI will cause an economic boom. Since we don't see the adoption and transformation of how work is done happening any time soon, thus the claim that AI will bring unbelievable returns remains unbelievable.
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