AI Innovation

The phrase “Goldilocks Economy” – an economy experiencing growth that’s neither “too hot” nor “too cold” – has been thrown around liberally in recent months. With falling inflation and low unemployment numbers, economists began to label the US economy as a “just right” fairytale. While economists have been optimistic through mid-year, the truth is that we are not there yet.

While the U.S. economy grew at a surprisingly high rate in Q4, many Americans are still worried about inflation, high federal interest rates and growing credit card debt. A radical solution is necessary for the U.S. to achieve sustainable growth and prosperity. I’ll let you in on the secret ingredient to achieving the Goldilocks ideal: Artificial intelligence (AI).

Clearing Up Misconceptions 

One of the most frustrating and biggest misconceptions I hear is that AI will take jobs. I cannot stand the AI doom and gloom. Jobs change; they don’t disappear. Automating the mundane aspects of jobs allows us to better use our time on things that can’t be automated. Automation doesn’t mean we’re left with nothing, it means we now have time for things with more value.

We have not had a technology in the last 200 years that has created anything apart from economic abundance, wage growth and better quality of life. Look at Apple for example. Not only has the global technology company completely transformed the way we communicate and compute, but its economic impact is also crystal clear. In 2014, J.P. Morgan’s Chief U.S. Economist Michael Feroli estimated that iPhone sales added one-quarter to one-third of a percentage point to the annualized growth rate of the gross domestic product (GDP), producing 10% of all GDP growth. That is just one organization’s single product. Now picture a technology with unlimited applications and potential across every industry to revolutionize the way we do business. That technology is AI.

The Secret Ingredient: AI

Across any industry, if you tell a company’s leaders that you have a magic ingredient to make all of their employees 40% more productive, do you think they will turn around and say, “Alright great, let’s fire 40% of our employees and make exactly the same products in the same way?” No, smart organizations realize they can make 40% more products at a cheaper price and take more market share. And they might even hire a lot more people because the ROI on hiring a single person for their output is higher.

An AI-powered intelligent workplace automates the everyday work processes and enhances employees’ outputs through seamless workflows, providing easy access to the information that employees need in order to do their jobs through smart knowledge management using natural language processing (NLP) and machine learning. A more advanced workplace may even have virtual assistants that remind them of upcoming deadlines and meetings, and or solve for things like forecasts for finance teams and run tests for coders in real-time with the click of a button.

Intelligent search is an example in practice. AI and ML-powered searches make seemingly “smart” observations based on what an employee searches for and their search patterns, then respond by providing “educated guessing” about what the employee is trying to track down. For instance, an employee may be looking for a site map for a corporate office they’ll be visiting. An intelligent search engine might ask if the worker also wants information about local amenities or company-related events in the vicinity. That technology saves the employee time to focus on their big presentation instead of getting bogged down with logistics.

When this begins to happen in practice with the integration of AI in worker productivity, the market will be flooded with goods and services that are coming out at cheaper prices. Workers will be far more efficient. Job creation will be net neutral to net positive. The economy will have a huge abundance of output, which will bring prices down, an anti-inflationary measure. Taking the GDP growth combined with lower inflation, we will finally reach the amazing Goldilocks zone. We can even expect to have a golden decade of economic growth, which will foster a huge quality life improvement for everyone in society.

The bottom line is that productivity growth is the only way to have economic growth. AI is going to bring the economy into the desired Goldilocks range by increasing worker productivity, hiring and driving down inflation. It’s time we embrace it.