Weekly Updates

  • The potential for the shiny new toy of artificial intelligence to generate productivity is still more an ideal than a reality. But adopting any new technology should eventually improve economic efficiency (otherwise, why change?). As investor interest broadens out to the application of technology, will any economy have a competitive advantage in using AI?
  • Academic work suggests that if AI improves an individual’s productivity, it will boost low-skilled workers’ productivity proportionately more. Critically, however, a low-skilled worker is not defined as the lowest skilled workers—in the US, low-skilled means individuals with “only” a high school diploma.
  • The OECD measures adult education levels, looking at literacy, numeracy, and problem solving. The US education system produces a “barbell” result—the top 5% of the population score highly, but the number of people with very low education skills (lower than the “low-skilled” definition) is high by G7 standards. Most key European economies, and the UK have lower levels of functional illiteracy and innumeracy. Moreover, their lowest skilled workers also achieve higher scores than their US counterparts.
  • If AI productivity gains are unevenly distributed, and disproportionately benefit workers with mid-level education, the US may be at a competitive disadvantage relative to other major economies.

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