Why don’t new technologies improve our productivity?

Why don't new technologies improve our productivity?
Why don’t new technologies improve our productivity?

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For years, American companies have believed that cloud computing and artificial intelligence increase wealth-producing productivity. This belief has sparked a wave of venture capital funding and corporate spending. He argues that the benefits will not be limited to a small group of tech giants, but will spread throughout the economy.

This hasn’t happened yet.

The government said this month that productivity was defined as the cost of goods and services produced per working hour and fell sharply in the first quarter of this year. Quarterly numbers often fluctuate, but they seem to have shattered previous expectations that productivity revival has finally begun, helped by the accelerated digital investment during the pandemic.

Productivity growth since the beginning of the pandemic is now about 1% per year, at a modest pace since 2010, the end of strong growth from 1996 to 2004, when productivity grew by more than 3% per year. It is far below the period of.

The economy is growing as well as increasing capital and labor. Another key factor is the country’s ability to generate and commercialize innovations that increase investment and worker productivity.

Percentage

It seems that a small percentage increase in productivity can have a significant impact on the welfare and living standards of the country over time. McKinney & Company reported last year that an additional 1% increase in productivity by 2024 over the next few years would increase Americans’ per capital income by $ 3,500. The average annual growth rate from 1948 to 1972 was 3.8%, which was the driving force behind postwar prosperity.

Productivity is not a panacea for economic illness. “Even if this optimistic view of digital waves is justified, it doesn’t mean that profits are actually shared,” said Laura Andrea, a professor at Haas School of Business at the University of California, Berkeley. Chairman of the Clinton Administration’s Council of Economic Advisors.

However, a less productive economy is a smaller economy with less resources to deal with social issues such as inequality.

Today’s productivity challenges are the subject of intense debate among economists. Robert J. Gordon, an economist at Northwestern University, is a major skeptic. According to him, artificial intelligence today is primarily a pattern recognition technique that analyzes large numbers of words, images, and numbers. According to Gordon, his achievements are “impressive, but not trans formative,” like electric and internal combustion engines.

Erik Bryan golf son, director of the Digital Economy Laboratory at Stanford University, is a leader in the optimistic field. He admits that he is a little disappointed that the increase in productivity is not yet evident, but he is convinced that it is only a matter of time.

“There is real change taking place, there is a wave of change,” Bryn golf son said. “We are seeing more and more facts on the ground.”

It will likely be years before there is a definitive answer to the performance debate. Bryan golf son and Gordon took a “long bet” last year and the winner was decided at the end of 2029. However, corporate and industry surveys using data from Census Bureau business surveys and job listings in line show patterns and barriers to technology diffusion.

The leaders are mainly large companies that have been investing in digital technologies for years and fast-growing young companies that are often backed by venture capital. Cloud computing is quite widespread, but it is not as modern a technology as AI applications.

Given that three-quarters of US businesses are small with fewer than 10 employees, some experts say it’s not all that surprising that uptake is limited at this stage.

At Anthem, a health insurer with plans covering more than 45 million people, about 75% of customer inquiries are now answered through digital channels such as web portals, mobile apps and speech recognition software. Three years ago, digital participation was around 30%. AI is a question-answering technology that helps people perform basic tasks like checking claims status, paying bills, and finding doctors. Partially excited.

Digital platform president Jivaro Krona estimates that digital automation has eliminated 10 million calls that Anthem’s call center was supposed to handle.

Anthem, who will change his name to Relevance Health next month, will not reduce the customer service team. However, the roles of these workers and the way they measure their performance have changed. The traditional measure of call center performance is “call turnaround time,” and the shorter the time per call, the better. Currently, Anthem wants the customer service team to resolve the caller’s problem as much as possible, rather than referral it to another department.

Many call center agents have undergone additional training to become what Anthem calls a “service navigator.” Performance measurements now include resolved issues and customer satisfaction surveys. Based on this broad range of measures, Krona says the company’s contact agent productivity will increase by 30-40%. Adding skills and redesigning jobs are just as important as improving technology, he says.

“Creating technical capabilities on their own is just the beginning,” Ronanki said.

As new technologies become more prevalent, it takes time for people to understand how best to use them. For example, electric motors introduced in the 1880s did not bring significant performance improvements until the 1920s, when mass-produced assembly lines redesigned bypass technology.

The personal computer revolution began in the 1980s, but it wasn’t until the late 1990s that machines became cheaper, more powerful, connected to the Internet, and actually improved in economic productivity. was.

The renaissance of the 1990s was fueled by a surge in technology investment by businesses and venture capitalists, especially in Internet and web start-ups. Similarly, according to research firm IDC, US software spending has more than doubled to $ 385 billion over the last decade as companies invest in digitizing their operations.

Crest a is a startup trying to solve the modern productivity problem of artificial intelligence. In 2020, Crest a announced its first product, real-time recommendation software and training for call center agents. This technology analyzes a large number of text and voice messages to identify behavior patterns and answer questions that can help resolve customer issues or increase sales.

Paid  Emma, co-founder and CEO of the company, said the goal is not to replace workers, but to improve their performance. Christ a is provided by A.I. He said this was made possible by recent advances in power and speed. The software he called a “game changer”.

Christ a has 200 employees, has raised more than $150 million in venture capital funding and has dozens of corporate clients, including Verizon, Cox Communications and Porsche.

Car Max, the nation’s largest used car dealer, began testing its Crest a software in December. “The AI ​​experiment comes after years of investment to move the company’s IT operations to more agile cloud systems,” said Jim Risky, executive vice president of strategy, marketing and products.

Customer inquiries to carmax contact centers often take a long time. Used vehicles are of different years, models, features and driving history, and different financing plans for large purchases. According to Lyska, fully automatic communication is impossible, since the range of questions is practically unlimited.

However, the computer assistants that can classify the complexity of a car and provide suggestions and information in real time were a delight. Crest a was first trained on Car Max contact center data, and the experiment began with a real-time chat agent who communicated with customers via text messages.

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