Study of 12,000 EU Firms Finds AI's Productivity Gains Are Real (cepr.org) 61
A study of more than 12,000 European firms found that AI adoption causally increases labour productivity by 4% on average across the EU, and that it does so without reducing employment in the short run.
Researchers from the Bank for International Settlements and the European Investment Bank used an instrumental variable strategy that matched EU firms to comparable US firms by sector, size, investment intensity and other characteristics, then used the AI adoption rates of those US counterparts as a proxy for exogenous AI exposure among European firms.
The productivity gains, however, skewed heavily toward medium and large companies. Among large firms, 45% had deployed AI, compared to just 24% of small firms. The study also found that complementary investments mattered enormously: an extra percentage point of spending on workforce training amplified AI's productivity effect by 5.9%, and an extra point on software and data infrastructure added 2.4%.
Researchers from the Bank for International Settlements and the European Investment Bank used an instrumental variable strategy that matched EU firms to comparable US firms by sector, size, investment intensity and other characteristics, then used the AI adoption rates of those US counterparts as a proxy for exogenous AI exposure among European firms.
The productivity gains, however, skewed heavily toward medium and large companies. Among large firms, 45% had deployed AI, compared to just 24% of small firms. The study also found that complementary investments mattered enormously: an extra percentage point of spending on workforce training amplified AI's productivity effect by 5.9%, and an extra point on software and data infrastructure added 2.4%.
So it cancels out... (Score:5, Informative)
Based on the previous post: https://tech.slashdot.org/story/26/02/18/0419214/thousands-of-ceos-just-admitted-ai-had-no-impact-on-employment-or-productivity [slashdot.org]
Re:So it cancels out... (Score:5, Funny)
Wait a second was this news article written by AI in response to the first news article?
Is it getting smarter and self aware
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Its funny because even if it's not fishy as fuck the gains are like less than you'd lose rolling out zero trust infrastructure or having a poorly configured jira
Re:So it cancels out... (Score:4, Funny)
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I find that AI can sometimes help with productivity, but other times it just wastes your time, so it probably balances out.
There was some Windows API stuff I wasn't familiar with, so I asked Gemini to write some sample code, which turned out to be better than the Microsoft example. So that time productivity increased.
Then I asked it to write an app that took scans of CDs (the discs laid face down on a flatbed scanner) and rotated them to be upright, or at least at some multiple of 90 degrees. It failed, tri
Proxy? Why? (Score:2)
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Re: Outdated study (Score:4, Insightful)
Same guy posted the same crap on the other post. Probably has financial interests in AI companies.
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Other benefits of AI (Score:2)
Fitter, happier, more productive
No longer empty and frantic
Like a cat, tied to a stick
That's driven into frozen winter shit
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Fitter, happier, more productive No longer empty and frantic Like a cat, tied to a stick That's driven into frozen winter shit
Wait until the next version of Claude [slashdot.org]. I've heard from insiders that it adds 2 inches to your dick and/or 2 cups sizes to your bust plus it does the dishes, doesn't complain, and performs enthusiastic oral sex on demand!
Re: Other benefits of AI (Score:2)
Does it make me lose enough weight that I can actually these enhancements?
Really? (Score:2)
I swear there was another article on slashdot saying the exact opposite today.
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I think this one says "You are more productive" and the other said "You won't be fired". The combined conclusion: Using AI does not replace you, but increases productivity and so leads to more and/or better output without the need to lay of people.
but at what (actual dollar) cost? (Score:3)
Of course, if anyone actually had to pay for all of the externalized costs, the net benefit would be negative.
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Garbage In, Garbage Out (Score:5, Insightful)
To credibly identify the causal effect of AI on productivity, we develop a novel instrumental variable strategy, inspired by Rajan and Zingales’ (1998) seminal work on financial dependence and growth. Their key insight was that industry characteristics measured in one economy – where they are arguably less affected by local distortions – can serve as an exogenous source of variation when applied to other countries.
We extend this logic to the firm level. For each EU firm in our sample, we identify comparable US firms – matched on sector, size, investment intensity, innovation activity, financing structure and management practices. We then assign the AI adoption rate of these matched US firms as a proxy for the EU firm’s exogenous exposure to AI. Because US firms operate under different institutional, regulatory and policy environments, their adoption patterns capture technological drivers that are plausibly independent of EU-specific factors. Rigorous propensity-score balancing tests confirm that our matched US and EU firms are virtually identical across key observable characteristics, validating the identification strategy. Our analysis draws on survey data from EIBIS combined with balance sheet data from Moody’s Orbis.
From there, they magically jump to their conclusion without any supporting data. Looks like a garbage burrito served with a side of word salad.
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Yes, this data analysis protocol makes no sense at all.
There is no reason to think that the adoption rate of AI by US firms tells you the adoption rate of AI by European firms. And absolutely no reason to think that these results are accurate enough to detect an effect as small as 4%.
These results are completely meaningless.
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Which also means that we can assume the truth is likely the opposite of what they're telling us or else they'd have simply propagandized with the truth.
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The "truth" is irrelevant. I see it as a Picasso of facts. It's art
It's the EU (Score:3, Funny)
Just showing up for work during the month of August will contribute a lot to productivity figures.
Re: It's the EU (Score:2)
My productivity is up (Score:5, Interesting)
But then I mainly use it as a natural-language front end to search engines, and to provide small snippets of code so I don't have to rewrite them or find my local copy.
There's no doubt it's made me more productive. Teaching the new guys how to use AI tools effectively in the same way though is weirdly difficult. They're not stupid, but I don't think they had enough time doing it the hard way to know what questions to ask or how to phrase them to get a useful answer... or how to give the responses a critical eye for errors.
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They're not stupid, but I don't think they had enough time doing it the hard way to know what questions to ask or how to phrase them to get a useful answer... or how to give the responses a critical eye for errors.
This. In order to truly be faster at your job when using AI, you have to already know the proper questions to ask the AI when you're stuck, including the proper context around the question, in order to get a useable response. This is something that comes only with experience.
Productivity... (Score:2)
You can't increase productivity (Score:4, Insightful)
When there is no competition companies just pocket productivity increases and turn it into big payouts for the largest shareholders. I want to be clear this is not your 401k. These kind of gains only go to the very top.
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Name a pure monopoly that exists in this day and age in the US. There are plenty of oligopolies, but few pure monopolies. Therefore, its relatively safe to assume there will always be competition.
False. For the most part, oligopolies don't compete meaningfully. There's usually zero price competition, often with most of the firms taking their cues on pricing from whichever company is the price leader for the market. They may differentiate their products slightly from one other, but not by enough to convince a significant number of customers to change providers.
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Which is not to say that you are necessarily wrong, just that it can be very hard to distinguish between collusion and normal market forces. It's only obvious when inflation-adjusted prices rise wit
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Unless you really dig into the profits and pricing behavior, you could just be seeing market forces working to normalize prices. The firms are going to face similar costs, similar profit requirements, and similar demand, so there is every reason to expect their prices to cluster around the market equilibrium.
Which is not to say that you are necessarily wrong, just that it can be very hard to distinguish between collusion and normal market forces. It's only obvious when inflation-adjusted prices rise without commensurate changes in external costs or demand.
The thing is, you don't even have to have collusion. When there are only a few companies in a space, there's no incentive to innovate, and there's no incentive to spend money that would drive operating costs down to compete with the other companies. Therefore, the cost stays high. Almost invariably, the appearance of a new major player drives costs suddenly down, because all of those cost-saving innovations suddenly are worth spending money on, because the new competitor jumps in with the latest, cheapes
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Also note that the funds into which one's 401k may be invested are often "the largest shareholders", and thus would directly receive those gains.
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Why?
Let's say you have x employees and create y units of whatever and sell it for z USD. Now you get an AI tool so your x employees create 2*y units and you sell them for 2*z USD. You doubled your profit without destroying a job. You could lay off half of your employees and make the same profit as before, but you likely want to increase your profit.
Everything wrong with AI (Score:3, Insightful)
Re: Of course it's real .. (Score:2)
And what are you actually doing with all this saved time? Fucking about doing nothing?
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writing cute prompts and test cases, lol.
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Fine. Then your employer should only pay you for the fraction of the day you need to do your work and not pay you when you fuck about.
Re: Of course it's real .. (Score:2)
Because you only work for the fraction of the day? Your employer pays you for the entire day. You're expected to work, with increased performance due to AI, for the whole day. You're technically defrauding your employer.
Re: Of course it's real .. (Score:2)
Truth hurts, eh?
Re: Of course it's real .. (Score:3)
I used Claude yesterday to write a couple of python functions. The output was functional, but the code was using very un-pythonic methodology and even doing things that are extremely frowned upon. The bot fixed it as soon as I pointed it out, but I can't imagine having to audit thousands of lines of code.
Difference between the US and EU- head count vs.. (Score:3)
Difference between the US and EU-
US-
Employee (100) + AI (4) =104%
this means we can do 100% with 96 employees! yay.. we saved on paying 4 employees! stocks rise. Employees are left with more work b/c AI isn't a direct replacement for a human in most cases, but a tool to help... are then are stuck doing more, so real productivity drops)
EU-
Employee (100) + AI (4) = 104%
this means company has grown productivity by 4% and use that productivity gain into profit, better work life balance, more time, better quality, any number of things that those gains can be applied to.
slightly different priorities... short vs long
plus the focus on implementation is different as are the employment laws-
EU-
develop AI to enhance employees and in a lot of cases, it is because countries have regulations about firing people that make it more difficult to simply fire a chunk of your workforce for no reason... it's almost as if the workers have some protections.
US-
to replace employees/head count
Just think about the phrasing common in the US- "head count" - that used to relate to animals on a ranch... not people. (i.e. X amount of heads of cattle).. dehumanizing your employees makes it easier to do this crap.
Re: Difference between the US and EU- head count v (Score:3)
EU: let's hire a few and be more selective on the projects we take on. Build up a war chest. Goes bad? Let's fire a few and use the war chest for some internal projects.
Quality? (Score:1)