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Your employer is (probably) unprepared for artificial intelligence

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Summary

This article looks at the impact of artificial intelligence (AI) on the economy. It notes that for AI to have a significant economic impact, millions of firms beyond tech centres like Silicon Valley would need to adopt it. It discusses how countries such as Japan and France have adopted new technology in different ways, with France doing a good job of spreading knowledge, while Japan is unusually innovative but does a poor job of spreading tech across its economy. It notes how the diffusion of technology helped propel productivity growth during the 20th century, but since the mid-2000s, firms have become increasingly cautious in adopting new tech. This has resulted in a two-tier economy with firms that embrace tech pulling away from the competition, and people stuck using old technologies suffering, along with their salaries. The article concludes that for AI to make a significant impact, it needs to be embraced at a faster rate than other recent technologies, and competition needs to be increased.

Q&As

What impact will artificial intelligence have on the economy?
Artificial intelligence may have a muted economic impact unless millions of firms beyond tech centres like Silicon Valley adopt it.

How has technology diffusion changed over the last two centuries?
Technology diffusion has narrowed over the last 200 years, with electricity and personal computing spreading faster than tractors.

What is causing lower diffusion of new technologies?
The nature of new technology, sluggish competition, and growing regulation are causing lower diffusion of new technologies.

What consequences are people facing when using old technologies?
People stuck using old technologies suffer, along with their salaries.

What factors will determine the success of artificial intelligence diffusion in the economy?
Factors that will determine the success of artificial intelligence diffusion in the economy include the cost of the technology, the competitive drive of firms, the public-policy goals of governments, and the willingness of businesses to adopt the technology.

AI Comments

👍 This article provides an interesting look at the potential economic impact of AI technology and how businesses can best take advantage of it.

👎 This article fails to adequately address the potential harms of AI technology, such as job losses and privacy concerns.

AI Discussion

Me: It's about how employers may not be prepared for the implications of artificial intelligence. It talks about how the diffusion of technology can have a huge impact on the economy, but that there's been a slowdown in its adoption in recent years.

Friend: That's interesting. What are the implications?

Me: Well, the article argues that a two-tier economy is developing, with companies that are able to embrace new technologies pulling away from those that are not. This could lead to slower growth and lower wages for those companies that are not able to keep up. It also suggests that regulation is playing a role in limiting the diffusion of technology, as politicians often have different goals in mind than efficiency. Lastly, the article argues that businesses may not be ready for the revolution that AI could bring, as it requires significant investment and changes to existing processes.

Action items

Research the latest AI technologies and how they can be applied to your business.
Reach out to experts in the field to learn more about AI and how it can be used to improve your business.
Develop a plan to implement AI technologies in your business, including budgeting for the necessary resources and training.

Technical terms

AI (Artificial Intelligence): AI is a type of computer technology that is designed to simulate human intelligence and behavior.
Tractor: A tractor is a large, powerful vehicle used for pulling or pushing heavy objects, such as plows, harvesters, and other agricultural machinery.
QR Code: A QR code (Quick Response code) is a type of barcode that can be scanned by a smartphone camera to quickly access information, such as a website URL.
Lithium-Ion Battery: A lithium-ion battery is a type of rechargeable battery that uses lithium ions as its primary charge carriers.
3D Printing: 3D printing is a process of creating three-dimensional objects from a digital file using a 3D printer.
Chatbot: A chatbot is a computer program designed to simulate conversation with human users, especially over the Internet.
Cloud Computing: Cloud computing is the delivery of computing services such as storage, databases, networking, software, analytics, and more over the Internet (“the cloud”).
Cobol: COBOL (Common Business-Oriented Language) is a programming language used for business applications.
MiniDisc: A MiniDisc is a type of optical disc used for storing digital audio.
Cassette: A cassette is a type of magnetic tape used for storing audio recordings.
GPT (Generative Pre-trained Transformer): GPT is a type of artificial intelligence model used for natural language processing.
Threads: Threads is a social media app developed by Instagram.
McKinsey: McKinsey & Company is a global management consulting firm.
KU Leuven: KU Leuven is a research university in Belgium.
George Washington University: George Washington University is a private research university in Washington, D.C.
George Mason University: George Mason University is a public research university in Fairfax, Virginia.
FedNow: FedNow is a real-time payments service developed by the Federal Reserve.