Traditionally, we think of productivity as increasing efficiency; of producing more with less.
For a standardised manufacturing process that definition may be right. But when we broaden productivity to the entire business, or to services rather than goods – it is not simply about working harder and doing more. Instead, it is about working smarter to produce better outcomes and greater value.
The rapid advance of generative AI tools are enabling businesses to automate tasks but beyond that, AI is also changing how we work through augmentation of those tasks.
In short, it is not as simple as saying that jobs will disappear – it’s far more complex than that.
Currently, we are seeing the first impacts of automation on slower job growth while still waiting for the benefits of augmentation enriching work to emerge.
This means that while AI is enabling tasks to be achieved easier and faster, we do not yet know its full potential for business and how it will impact productivity.
For some firms, productivity benefits of AI are currently emerging more through targeted, incremental applications rather than sweeping, transformative change and at the macroeconomic level, noticeable productivity gains have yet to materialise significantly.
Effects on jobs
There are differing views on the effects on jobs too. A comprehensive academic study estimates that 19% of US workers will see at least half of their tasks impacted by generative AI systems, while about 80% of jobs will experience changes to at least 10% of their tasks.
This suggests that even if jobs aren’t entirely eliminated, many will be significantly altered by AI tools as people take on new roles created by changes to how we work.
This leads to the question of what we will be able to achieve as more resources are freed up in AI. A report by McKinsey & Company suggests that 20-50 million new jobs could be created globally by AI by 2030. These could include AI trainers, data analysts and scientists and ethics and policy specialists.
At the same time, AI may free up resources for tasks it cannot perform, particularly socially intensive roles such as those in care, hospitality, and other human-centred services.
This naturally leads to the question of how we can prepare people for those roles, to ensure that they have the right skills and expertise to fill them.
Complementary investments
For businesses, the big question currently is how quickly to embrace technology, and this is where opportunity can become a challenge.
AI has been heralded as a great equaliser and, in many ways, it is. It enables small companies to scale faster and achieve things that they couldn’t before, giving them access to the same tools that large companies have.
But for AI to bring more than incremental improvements, organisations need to confidently make investments which are complementary to AI, most notably in workforce capabilities such as data and analytical skills, as well as leadership and collaboration.
AI is transforming every part of business, so investments in organisational and economic competencies are also important, such as marketing and branding, organisational design, regulatory oversight and governance for responsible use of AI.
By pooling knowledge and experience across these areas, businesses and organisations can gain deeper insights into how AI will impact them.
Taking the leap vs indecision
Nevertheless, when implementing technology requires significant investments, large companies are at an advantage. For smaller companies, hyper-technological change can lead to stagnation due to indecision.
Conversely, decisions that are taken quickly without proper consideration and driven by a fear of missing out rather than assessing the associated gain, can lead to significant financial loss and even business failure.
Undoubtedly, there will be winners and losers. But to best equip organisations to make the right decisions, we need to embrace the importance of the ecosystem within which each firms operates.
Embracing collaboration to better implement AI
Indeed, to obtain the full benefits from AI, firms cannot go it alone. Government, companies, peers, advisory organisations all need to work together to understand not only how technology affects individual organisation, but also how they can work better together.
No one can predict how AI will impact business in five years, but by working together and ensuring we extend the knowledge ecosystem as far as possible, productivity will be maximised and the whole world will benefit.
Bart van Ark is a professor of productivity studies at University of Manchester and managing director of the Productivity Institute.
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