Does AI really boost productivity?

May 1, 2023

Open AI created hype with the release of Chat GPT, but it’s still unknown whether and how generative AI will affect productivity.

Researchers recently studied what happened when a Fortune 500 software company gave a generative AI tool to 5,000 of its customer service employees. The AI tool was designed to suggest what employees should say as they gave technical support over text-based chat.

The research team—led by Erik Brynjolfsson, professor and senior fellow at the Stanford Institute for Human-Centered AI—found that the tool increased productivity by 13.8 percent. In the study, productivity was measured as “resolutions per hour” (or how many chats an employee was able to successfully resolve per hour).

The study also found that generative AI helped less-skilled, less-experienced employees the most. Brynjolfsson’s team believes that AI made “tacit knowledge,” usually gained through experience, available to new employees.

Employees who used the generative-AI tool were also treated better by customers—which may improve employee retention. Brynjolfsson’s team notes that turnover is high in “contact centers,” where about 60 percent of employees leave annually, with each departure costing firms $10,000 – $20,000.

Together, these findings suggest that companies may be able to use generative AI not only to increase the productivity of new employees, but to improve training and job satisfaction.

The study, published in April as a working paper by the National Bureau of Economic Research, is among the first empirical studies to look at how generative AI affects productivity.

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