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What if the AI boosters are wrong?

Writer's picture: The San Juan Daily StarThe San Juan Daily Star


Daron Acemoglu, an economist at Massachusetts Institute of Technology, sits for a portrait in Cambridge, Mass. on Dec. 21, 2021. (Cody O’Loughlin/The New York Times)

By Bernhard Warner


Despite the advent of personal computers, the internet and other high-tech innovations, much of the industrialized world is stuck in an economic growth slump, with Organization for Economic Cooperation and Development countries expected to expand on aggregate just 1.7% this year. Economists sometimes call this phenomenon the productivity paradox.


The big new hope is that artificial intelligence will snap this mediocrity streak — but doubts are creeping in. And one especially skeptical paper by Daron Acemoglu, a labor economist at Massachusetts Institute of Technology, has triggered a heated debate.


Acemoglu concluded that AI would contribute only “modest” improvement to worker productivity and that it would add no more than 1% to U.S. economic output over the next decade. That pales in comparison to estimates by Goldman Sachs economists, who predicted last year that generative AI could raise global gross domestic product by 7% over the same period.


The bullish camp has great hopes for AI. Sam Altman of ChatGPT maker OpenAI sees AI wiping out poverty. Jensen Huang, the CEO of Nvidia, the dominant maker of the chips used to power AI, said the technology has ushered in “the next industrial revolution.”


But if the boosters are wrong, it could be trouble for the developed world, which is in desperate need of a productivity breakthrough as its workforce ages and declines.


AI won’t reverse stagnation, Acemoglu told The New York Times. One reason: The technology can automate only about 5% of an office worker’s tasks, he found. “AI has much more to offer to help with the productivity problem. But it will not do that on its current path; that’s why I’m so troubled by the hype,” he said.


Acemoglu sees AI as a tool that can automate routine tasks — for example, speed up writing emails, sales pitches or basic computer code. That could free workers to tackle more brainy challenges like developing a business strategy for a new product launch. But he questioned whether the technology alone can help workers “be better at problem solving or take on more complex tasks.” Achieve that, and companies will see worker productivity climb, he added.


Acemoglu’s downbeat view is perhaps not surprising. He has been writing for decades about the good and ill effects of technology’s influence on the job market and the economy and has warned that the Big Tech arms race to dominate AI could have a destabilizing effect on society.


And he’s not alone in questioning the AI hype. David Cahn, a partner at venture capital giant Sequoia, and analysts at Barclays and Goldman Sachs have warned recently that the billions of dollars companies are pouring into AI could create a speculative bubble. (That said, Sequoia just led a funding round for the startup Fireworks AI.)


Critics say Acemoglu is underplaying AI’s potential to spur scientific advancements and its effect on the business world. “A lot of the benefits of AI will come from getting rid of the least productive firms,” argued Tyler Cowen, an economist who said the model behind Acemoglu’s study is wrong.


Lynda Gratton, a professor of management practice at London Business School who advises companies about adopting AI, is optimistic. But she thinks it’s too early to know if the technology will be a killer app for boosting productivity until it’s tested in the workplace over the next few years.


Gratton said corporations are already running vibrant AI experiments. Some businesses will see AI “as a tool to ground out costs and inefficiencies,” she said. “But if the company wants to build for growth, it will need tools to innovate.”


Acemoglu also notes the importance of spurring innovation to bolster workplace efficiency and, in turn, make aging countries more competitive. Is AI the tool to make that happen? To that question, he answered with a figure: 40%. If AI tools could automate roughly that percentage of a typical worker’s task load, then he’d reconsider his position on the technology. “I am not a total doomer,” he added.

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lekor adams
lekor adams
Aug 21, 2024

If the AI boosters are wrong, it raises important questions about the future of technology and its role in business. While AI holds great potential, it's crucial to approach its implementation with caution and a deep understanding of each company's unique needs. Da-Com is committed to providing leading office technology solutions and exceptional service to our clients in Missouri and Illinois. We recognize that every business has its own unique processes and workflows, so we strive to offer tailored action plans that fit their needs and budgets. By focusing on building long-term, meaningful relationships with local businesses, Da-Com helps ensure that technology is used wisely to support growth and community prosperity.

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