Subtleties of AI Productivity Gains
Warning
Trigger Warnings:
- Technology Trigger: For those of you that think LLMs generally suck, whilst I get it, I'm afraid I'm not in that camp; I'm one of those AI evangelists that likes LLMs, doesn't mind vibe-coding (within certain contexts, e.g. it's throwaway or low impact), and generally enjoy seeing the rapid pace of development in the AI domain!
- Economics Trigger: At the risk of coming across rather thick, I'm going to be discussing economics, which is not my background.
In 2024, a panel of speakers at the World Economic Forum discussed Generative AI impact to labour markets with the following panel themes (of which I'll abbreviate): From skimming the speakers, I think it would have been prudent to include someone sitting in a technical role, to provide a more rounded view on the merits of applying novel technology.
Generative AI has catapulted AI technology to [one of the] most impactful innovations of the Fourth Industrial Revolution. [Some] predict its effect on global value chains is analogous to the steam engines of the Industrial Revolution.
With [speed and accessibility], what is the [impact] for industry worldwide and how do leaders manage its risks?
Stepping clear of the AI risk aspect and focussing instead on the impact, it's clear that the consensus is that a group of economists and CEOs predict outsized returns from Generative AI. But did that turn out to be the case in 2025?