Why It’s So Hard to Measure AI’s Effects on Productivity
We need better data to determine whether AI applications deliver time savings or impose a time tax.
“Time is money” is a well-worn phrase in the corporate world. Like many other clichés, it’s often used yet rarely taken seriously. But in the context of artificial intelligence and its effects on economic productivity, time—and more specifically, time savings—is becoming one of the most important measures of whether the huge investments in the technology will pay off.
Any technology’s potential to lift living standards depends on its ability to drive improvements in what economists term total factor productivity—that is, getting more value out of all the resources used in the production of goods or services. Productivity has become a key preoccupation of business leaders and policymakers alike, because its growth has slowed substantially in recent decades, even as technological change appears to be progressing astonishingly fast.