Setting the scene 

It is 1980, and I am sitting in my bedroom after school. I am watching a rerun of Planet of the Apes on the 4:30 Movie on New York’s WABCTV Channel 7. It is on a portable black and white TV which, on a good day, allows me to choose from 6 channels. If I was enterprising, AND I WAS, I might even get a snow-filled screen of 2 UHF channels, one of which was an all-Spanish channel. So, that brings me up to 8 channels on a good day. 

 I was multi-tasking ;) while doing my homework. Actually… I really WAS multi-tasking because under my hands was my brand-new PET 2001 computer, pictured below.

 I was a fortunate young man because my father, being an electrical engineer, was very tech-forward, and he pulled out all the stops to feed my growing hunger for shiny, new gadgets. The computer cost him around $500, which was a lot of money at a time when engineers were not quite as in-demand as they are today. In truth, I was already an accomplished programmer having taught myself the C Programming language on a terminal which my father borrowed from work. I went through miles of paper and kept our only phone line busy for hours on end. So, getting my very own computer was a game changer for me. Fortunately, learning the more primitive BASIC programming language was quick and simple. Once I got that down, it was only a matter of time before I started to use the computer to do my homework. I could get a lot more done in far less time. And I could store my work on a cassette tape!!

 Within a year or so, my “M” key started to stick, which slowed me down quite a bit. I had saved up some money and set my eyes on a new computer, an Apple II+. By that point, there was a growing list of software 

available. There were word processors and even a program called Visicalc… a spreadsheet! I could do the work of 2 people in half the time. My productivity was off the scale! I never looked back. 

I wasn’t alone, but I was certainly in the minority. According to the US Census Bureau only around 8% of households even had a computer in 1984. It took until 2000 for that number to rise to 51%. Clearly a lot happened during those years and not just in the home, but in industry where decentralized computing penetrated farther and farther making workers more and more productive. Clearly, that productivity aided in the growth of Gross Domestic Product, or GDP. 

A simplistic view of economic output 

Imagine that you have an apple orchard, and you make money by selling apples. The more apples your orchard yields, the more money you make. Clearly you want to get a higher yield. Let us say that you buy an Apple Computer to analyze your orchard’s yield and you discover a way to more effectively grow apples and therefore your orchard’s yield per acre is higher. That is great news, however, your ultimate success is limited by the number of apples that you can pick in a given amount of time. Your productivity, ultimately, will be dictated by the number of apples you can pick in 1 hour. You have been doing this for a long time and you are really efficient at picking apples, so there is no way possible to increase your productivity, and your output… or Gross Product will always remain constant. No growth! One day, you are browsing the internet on your Apple Computer, and you see that a new invention helps apple pickers pick more apples in 1 hour. In essence, there is a new technology that increases productivity. The growth of your enterprise can now resume. 

Though this example seems overly simplified, the economy works in a similar fashion, limited by resources and ultimately, productivity of labor. Knowing this, you can appreciate how technological and mechanical innovations have played a big role in enabling continued GDP growth in industrial and post-industrial eras. Examples of those innovations are steam power, electric power, and readily available healthcare. Of course, we can’t ignore information technology which is now not only on your desk and your lap, but also in your pocket and your wrist. Check out this next chart of US GDP and see how growth exploded since my homework session in 1980. 

But now what? 

Almost everyone is using computers and smart devices now. So, if we want to continue to grow at the same pace as we have since 1980, what do you suppose holds the answer? Check out this next chart to see how productivity has already faded in the 2010s through today. 

Last month I interviewed ChatGPT for your entertainment. But this month, I am here to tell you how AI can be that game changing innovation that will revive worker productivity just as early desktop computing did in prior decades. 

What can AI do for economic productivity? 

Enhanced Productivity and Automation 

AI technologies have the potential to greatly enhance productivity across industries. By automating repetitive and mundane tasks, AI liberates human capital for more creative and strategic endeavors. Automated systems powered by AI can perform complex calculations, analyze data, and generate insights at a speed and scale unattainable by humans alone. As a result, businesses can streamline operations, reduce costs, and improve overall efficiency. Increased productivity not only leads to greater output but also facilitates economic growth by freeing up resources that can be allocated to other productive activities. 

Accelerated Innovation 

AI has the potential to act as a catalyst for innovation, fostering breakthroughs across industries. Machine learning algorithms can rapidly process and analyze massive amounts of data, enabling researchers and scientists to uncover novel insights. This can lead to advancements in fields such as medicine, materials science, energy, and agriculture, among others. Additionally, AI-driven tools can support the development of new products and services, optimize supply chains, and enable personalized customer experiences. By promoting innovation and technological advancements, AI contributes to economic growth by driving productivity gains and fostering market competitiveness. In essence, AI is technology that can CREATE new technology! 

Improved Decision-Making 

AI-enabled tools and algorithms can augment human decision-making processes by providing valuable insights and predictive expertise. Machine learning algorithms can analyze large datasets to identify patterns, trends, and correlations, enabling businesses to make smarter, data-driven decisions. This capability is particularly useful in sectors such as finance, healthcare, and marketing, where accurate predictions and real-time insights are crucial. By leveraging AI technologies, businesses can optimize their strategies, reduce risks, and maximize returns, and ultimately, contribute to overall economic growth. 

Don’t sell the farm… um, orchard yet 

Are you worried that AI and machines are going to take over your job? Contrary to popular concerns about job displacement, AI has the potential to create new job opportunities and stimulate economic growth. While some repetitive tasks may be automated, AI technologies require skilled human oversight for their development, maintenance, and operation. This results in the creation of new jobs related to AI research, data analysis, and software engineering. Dare I mention AI ethics and legal expertise? Furthermore, AI-driven innovations can spur the growth of entirely new industries and markets, leading to job creation in sectors that may not have existed before. Therefore, AI's positive impact on economic growth has the potential to extend far beyond productivity gains, encompassing employment and entrepreneurial opportunities. 

A final word… for now 

Artificial Intelligence holds immense potential to positively impact economic growth across various sectors. By enhancing productivity, improving decision-making, and fostering innovation, AI contributes to the overall economic well-being. However, we are still in the early stages of AI commercialization. Governments, businesses, and stakeholders must collaborate to harness AI's potential while keeping in check any potential risks. Many early players have emerged in recent months throwing light on years of research and development in the field. As the field of technology evolves, and it already is, winners will emerge, and still other companies who don’t even exist today will come forward. Apple is the largest US company with a value of just under $3 trillion. Since I got my PET 2001 in 1980 the company faded into obscurity and IBM rose as a pivotal force in the PC revolution but eventually exited the industry. I eventually gave my PET away to a friend to make room for my double tape-deck boombox. If I would have kept it, I could have sold it on eBay where one recently sold for over $1,000 to a sentimental collector. I still have my first two Apple computers in my basement… I will never part with those ;) .