Wendy’s ordering kiosks. Ben & Jerry’s grocery store freezers. Abercrombie & Fitch’s marketing. Many mainstays of the American customer experience are increasingly powered by artificial intelligence.
The question is whether the technology will actually make companies more efficient.
Rapid productivity improvement is the dream for both companies and economic policymakers. If output per hour holds steady, firms must either sacrifice profits or raise prices to pay for wage increases or investment projects. But when firms figure out how to produce more per working hour, it means that they can maintain or expand profits even as they pay or invest more. Economies experiencing productivity booms can experience rapid wage gains and quick growth without as much risk of rapid inflation.
But many economists and officials seem dubious that A.I. — especially generative A.I., which is still in its infancy — has spread enough to show up in productivity data already.
Jerome H. Powell, the Federal Reserve chair, recently suggested that A.I. “may” have the potential to increase productivity growth, “but probably not in the short run.” John C. Williams, president of the New York Fed, has made similar remarks, specifically citing the work of the Northwestern University economist Robert Gordon.
Mr. Gordon has argued that new technologies in recent years, while important, have probably not been transformative enough to give a lasting lift to productivity growth.
“The enthusiasm about large language models and ChatGPT has gone a bit overboard,” he said in an interview.
The last time productivity really picked up, in the 1990s, computer manufacturing was getting a lot more efficient at the same time that computers themselves were making everything else more efficient — allowing for a sector-spanning productivity increase. Today’s gains may be less broad, he thinks.
Other economists are more optimistic. Erik Brynjolfsson at Stanford University has bet Mr. Gordon $400 that productivity will take off this decade. His optimism is based partly on A.I. He ran an experiment with it at a large call center, where it especially helped less-experienced workers, and has co-founded a company meant to teach firms how to leverage the technology.
Many companies seem to be in Mr. Brynjolfsson’s camp, hopeful that the shiny new tool will revolutionize their workplaces. Companies are using A.I. and generative A.I. for everything from writing marketing emails to helping set prices to answering employees’ human resources and legal questions.
Here are a few areas where companies say that the latest A.I. technology is being used in ways that could influence productivity, pulled from interviews, earnings calls and financial filings.
Got an annoying task? There’s an A.I. for that.
Employees spend a lot of time trying to figure out human resources-related questions. Companies have been investing in generative A.I. to help answer those queries more quickly.
At Walmart, the largest retailer in the United States with 1.6 million workers, the company’s employee app has a section called “My Assistant,” which is backed by generative A.I. The feature uses the technology to quickly answer questions like, “Do I have dental coverage?”, summarize meeting notes and help write job descriptions.
Walmart rolled out the technology to its U.S. corporate work force last year.
The retailer has been clear that the tool is meant to boost productivity. In an interview last year, Donna Morris, Walmart’s chief people officer, said one of the goals was to eliminate some mundane work so employees could focus on tasks that have more impact. It’s expected to be a “huge productivity lift” for the company, she said.
The algorithms want to sell you things.
Tony Spring, Macy’s chief executive, said the department-store chain is experimenting with A.I. to tailor its marketing. The company is using generative A.I. to write elements of emails, and is…
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