AI Boosts US Productivity

What happened

Economists predict the US will extend its productivity lead via an AI-driven boom, potentially creating a 'jobless profit boom' with lower inflation but fewer jobs. Surging investment in computer hardware and software indicates AI's role in economic growth, enabling more output with fewer workers. While AI and decentralised financial technologies are anticipated to increase productivity, tangible gains remain unconfirmed. Concerns exist regarding AI overhyping and a potentially hostile labour market for task-based workers displaced by software.

Why it matters

The predicted AI-driven productivity surge introduces a significant operational constraint on workforce planning and resource allocation. This increases due diligence requirements for human resources and operational management to assess and mitigate potential job displacement, particularly for task-based roles. It also creates an oversight burden for procurement and IT departments to evaluate AI investments for tangible productivity gains against overhyped expectations. The burden falls on HR for workforce transition strategies and on operational leaders to manage efficiency gains against employment stability.