AI may be everywhere, but it's nowhere in recent productivity statistics

INTERVIEW Analyst firm Forrester's vice president and principal analyst J. P. Gownder remains unconvinced that AI will revolutionize productivity.

"Where we are today, we're not seeing it," he told The Register in an interview this week.

During our conversation, Gownder cited US Bureau of Labour Statistics that suggest the advent of the personal computer also did not improve productivity, which improved by 2.7 per cent annually from 1947 to 1973, but just 2.1 percent between 1990 and 2001.

INTERVIEW Analyst firm Forrester's vice president and principal analyst J. P. Gownder remains unconvinced that AI will revolutionize productivity.

"Where we are today, we're not seeing it," he told The Register in an interview this week.

During our conversation, Gownder cited US Bureau of Labour Statistics that suggest the advent of the personal computer also did not improve productivity, which improved by 2.7 per cent annually from 1947 to 1973, but just 2.1 percent between 1990 and 2001.

"We use that to then ask 'Is AI good at these capabilities and these tasks?' And by building that model, what we're able to do is to understand how strongly AI influences each of those 800-something job categories when we cross reference that with the automation potential that Frey and Osborne came to," he said. Forrester can then calculate the "automation potential" for many jobs.

The analysts also pondered whether large organizations are capable of using AI and, if so, the technology's effectiveness.

"A lot of generative AI stuff isn't really working," Gownder said. "I mean, enterprise, and I'm not just talking about your consumer experience, which has its own gaps, but the MIT study that suggested that 95 percent of all generative AI projects are not yielding a tangible P&L benefit. So no actual ROI. McKinsey has something like 80-something percent that don't. It is just further context that says we're not at a place where lots and lots of people are losing their jobs right now."

In calls with more than 200 organizations Gownder said researchers found that some of last year's large-scale job cuts were belt-tightening decisions, not the result of shifting work to AI.

"So then that's not losing a job to AI. That is a financial decision masquerading as an AI job loss. They're just saying: 'Well, we're hoping we'll fill it with AI at some point.' So that is a very different proposition than AI is actively stealing all these jobs."

There is a real phenomenon of a frozen white collar job market in which corporations are not hiring for open roles as a hedge to see if jobs can be duplicated with AI, he said.

"But let's face it, when you have work to do, it's got to get done at some point," Gownder said. "If the AI doesn't work out, they're either going to have to hire or they're going to have to find some other solution."

Gownder said historically, the loss of industrial and manufacturing jobs in the USA's "rust belt" was driven by globalization not robotics, and he sees a similar scenario playing out now with AI.

"Outsourcing is a very popular one," he said. "They're firing people because of AI, and then three weeks later they hire a team in India because the labour is so much cheaper."