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Ai and The Productivity Imperative

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Over the last four decades, rapid emerging-economy growth brought a surge in productive capacity, which acted as a powerful supply-side disinflationary force. China, in particular, served as a robust engine of growth. But that emerging-economy growth engine has weakened substantially in recent years. China’s post-pandemic growth is well below potential and declining. But there is promising news.

AI advanced from handwriting recognition to speech recognition to image and object recognition, the conventional wisdom was that the technology worked best in well-defined domains. That changed with the rise of large language models (LLMs) and generative AI more broadly. LLMs are capable of comprehending language and appear able to detect and switch domains independently, perhaps bringing them one step closer to artificial general intelligence. The potential for broad-based productivity enhancement is considerable.

Less-experienced customer-service agents benefited the most from the tool, indicating that AI—which encapsulates and filters the accumulated experience of an entire system over time—can help workers “move down the experience curve” faster. This leveling-up effect will probably be a common feature of AI applications, particularly those that fit this digital-assistant model.

Source: Diplomatic Courier