The idea factory in artificial intelligence

Economists find that AI’s potential in boosting productivity may lie in the notion of an infinite supply of ideas.

The Monitor's View

The future of the global economy has “brightened,” found the Organization for Economic Cooperation and Development, a group of 38 wealthy countries. The OECD’s economists cited many factors for a potentially better rate of growth. But one stands out: a rapid rise in the use of artificial intelligence to improve worker productivity.

The OECD cited a couple of examples: People who write for a living and now rely on AI are about 50% more efficient. Computer coders are 60% more efficient.

These gains are “huge,” Clare Lombardelli, OECD’s chief economist, said last week. Yet they don’t quite capture future gains, she added, as the world begins to use AI to change “what we do as well as how we do it.”

That’s not all. The promise of AI to boost output per capita may help counterbalance a widespread worry that the future is hindered by a “scarcity of ideas,” according to an OECD report in April. The reason: AI, which is innovative enough, has begun “triggering an acceleration of innovation.”

Companies adopting AI have produced higher numbers of patents and new products. In particular, Al will enhance basic research by quickly generating new hypotheses that will then yield new inventions. This will allow researchers to “go beyond the low hanging fruits of scientific discovery,” the OECD found. AI “may continuously push out the productivity frontier.”

Ideas “are different from nearly all other goods in economics,” said Charles Jones of the Stanford Institute for Economic Policy Research at a symposium last year. Unlike material goods or workers, ideas do not have rivals because they are “infinitely usable” by any number of people. 

“In the long run, growth in living standards is determined by growth in the worldwide number of people searching for ideas,” he said. That number is determined by available talent, level of investments, migration patterns, and the size of the world population. As for AI’s potential to boost growth, he added, it is “perhaps the most uncertain but also has the greatest upside potential.”

“Artificial intelligence appears to be a new general purpose technology, perhaps on par or even exceeding electricity and the semiconductor,” he said.

For all its potential for misuse, AI at least has begun to alter how the world thinks about sources of inspiration. Or as economist Paul Romer, a winner of the Nobel Memorial Prize in Economic Sciences, has noted, “We consistently fail to grasp how many ideas remain to be discovered.”