Responsible AI: Unlock Next-level Labor Productivity

Labor productivity is the primary determinant of a country’s long-term prosperity and welfare. From 1950–1973 productivity growth was over 3.5%, which created great economic prosperity for Americans. From 1773 to 1995, the productivity growth was steady at 1.6%, but the growth increased to almost 3% with the advent of the PC, internet, and mobile from 1995–2005. We now have the lowest labor productivity growth of 1.5% since 2005.

In the last three decades, the PC revolution, the internet revolution, and now the AI revolution have been driving forces toward the digitization of information. These breakthroughs created waves of automation, boosting labor productivity. Unlike the previous automation waves, whose scope was mostly limited to physical jobs or routine cognitive tasks, the AI revolution brings new automation waves that will highly impact cognitive workers and jobs.

AI productivity impacts all professionals globally, from doctors and lawyers to managers, writers, salespeople, and consumers. The latest innovation of generative AI brought renewed focus and inflection point on AI adoption, where billions of users see productivity gains instantly with tools like ChatGPT.

A recent research report published by Open AI and the University of Pennsylvania found pervasive productivity gains by using Generative AI tools as standalone or integrated into other productivity tools. 15% of all US worker tasks in could be completed significantly faster at the same level of quality. When incorporating software and tooling built on top of Generative AI tools, these productivity gains are witnessed on 47 to 56% of all tasks. This is quite profound.

Microsoft, Google, Adobe, Salesforce, Oracle, and other productivity tool providers already announced generative AI integrations into their products. This month, Google, Meta, Microsoft, and Amazon announced huge advancements in generative AI capabilities. More than a thousand AI tools have been made this month. These advancements, newer tools, and evolved capabilities will create new waves of cognitive task automation for enterprises, governments, small businesses, and consumers. Experts believe that AI innovation is still nascent after recent breakthroughs, and they feel more advanced breakthroughs are yet to come.

Generative AI tools reached mainstream adoption much faster than previous technologies. The popularity of ChatGPT, Dall-E, and Jasper and noticeable productivity benefits to developers, writers, and entrepreneurs accelerated AI adoption. Chat GPT is the most popular website, with a hundred million active users. 50%+ enterprises have used ChatGPT or equivalent tools this year.

Now a confluence of broad enterprise and consumer AI adoption, huge corporate and venture capital investments, rapid technology advancements from market leaders and open source developer collaboration, and early signs of significant productivity gains creates optimism for superior labor productivity gains since world wars. We can expect US labor productivity to accelerate by 1–2% with the rapid AI tool adoption in the next five years. A 2% productivity gain, on top of 1.5% baseline projected growth, will bring overall labor productivity to 3.5%, the best productivity since World War II.

The productivity gains have yet to be a slam dunk. AI creators and users must resolve upcoming AI challenges on new security threats, regulation, job loss, intellectual property, safety, and governance.

The good news is that the AI race is at its peak among the market leaders like Google, Meta, and Microsoft, who have deep pockets. Venture capitalists are betting big on the AI technology. The US government is excited about the technological edge, esp. against China, and not seriously thinking about AI strict regulation, unlike the European Union. All these forces help the US continue AI innovation and adoption rapidly, resulting in a significant labor productivity boost.