04/03/2024

Companies are Testing AI to Improve Their Operations

Economists doubt AI is already visible in productivity data

Wendy's menu boards. 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.

Please select this link to read the complete article from The New York Times.