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Artificial Intelligence through the lens of Productivity

• 2 min read

It goes that there are three ways to grow the economy: Population, Participation and Productivity. Population growth in Australia is rebounding back to its long-term trend after re-opening; and participation is strong but has limited upside.

Productivity is the efficiency of production of goods or services and productivity growth is a driver of increasing living standards. Increasing productivity helps to temper inflation and grow real wages. In Australia, productivity growth has been decreasing since the 90s.

The Responsible AI Question

There are questions being asked about the Responsible use of Artificial Intelligence (AI) and its impact on fairness, bias, accuracy, ethics, transparency and more. A recommended book is “Weapons of Math Destruction” by Cathy O’Neil.

The impact of AI on the future of jobs and work is complicated, with policy makers and researchers having wide-ranging views.

AI and Historical Context

There are examples where AI is being used successfully in increasing individual productivity. Productivity and new technology have always been interconnected, similar to automation in the Industrial revolution or the Internet’s impact.

Real-World AI Productivity Examples

1. Victorian Department of Transport

The Victorian Department of Transport is using AI and computer vision to improve road transport operations. AI can analyze over 1000 livestreams in real-time, enabling proactive incident response that would be impossible with human monitoring alone.

2. Generative AI for Software Development

Generative AI and Large-Language Models are improving software developer productivity. Tools like Amazon CodeWhisperer can generate code suggestions based on comments and existing code, significantly accelerating development cycles.

The Productivity Lens

Using productivity as a lens for AI reveals opportunities for:

  • Addressing worker shortages in critical sectors
  • Growing businesses through enhanced efficiency
  • Modernizing the economy with intelligent automation
  • Increasing national wealth through improved output per worker

While the responsible use of AI remains a crucial consideration, focusing on productivity benefits helps identify where AI can create genuine value for individuals, businesses, and society as a whole.

This perspective on AI through productivity offers a framework for understanding how artificial intelligence can contribute positively to economic growth and living standards, while acknowledging the important ethical considerations that must guide its implementation.