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Report Summary: Machines of Mind: The Case for an AI-Powered Productivity Boom by Martin Neil Baily, Erik Brynjolfsson and Anton Korinek


Artificial intelligence (AI) is a transformative agent for businesses, governments and economies. At the core of this upheaval lies a potential surge in productivity that could spark a robust worldwide expansion of economic activity. Scholars Martin Neil Baily, Erik Brynjolfsson and Anton Korinek analyze AI’s implications for long-term productivity growth and its impact on labor utilization, income disparities and wealth concentration. Executives, entrepreneurs and investors will find this an insightful though academic look at AI’s emerging economic effects.


  • Artificial intelligence (AI) will dramatically increase worker productivity in coming decades.
  • With outsized productivity gains from AI, worldwide GDP will grow.
  • AI will significantly disrupt the labor market.

Report Summary: Machines of Mind: The Case for an AI-Powered Productivity Boom by Martin Neil Baily, Erik Brynjolfsson and Anton Korinek


Artificial intelligence (AI) will dramatically increase worker productivity in coming decades.

AI will prove to be a catalyst for gains in the global economy. Experts note that the primary driver of this expansion will be a resurgence in worker productivity growth, which has been static at 1.5% over the period from 2005 to 2022. This is roughly half the productivity growth seen in the years from 1948 to 1973 and from 1995 to 2005. Productivity, as measured by “the amount of output created per hour worked,” is a fundamental component of economic dynamism over time.

“Because information and knowledge work dominates the US economy, these machines of the mind will dramatically boost overall productivity.”

The functionalities and uses of AI are proliferating rapidly. The most common application in the marketplace is generative AI, which feeds into “total factor productivity” (TFP). TFP measures technology’s effects on production, rather than just the impacts of labor and capital. TFP is the foremost factor in producing sustainable long-run economic health.

AI’s explosive growth – coupled with the expansion of computing capabilities – has major implications for workers across a range of industries. Researchers posit that four out of five employees in the United States could feel the disruptive force of AI, both positive and negative. Unlike previous transformative technologies, AI radically changes the nature of “cognitive work.” Users experience greater speed and efficiency in completing tasks, which then boosts their output.

Outsized productivity gains from AI will drive worldwide GDP growth.

Some forecasters expect a global GDP expansion that is directly related to AI innovation of some 7%. This growth emanates from greater production and an increased pace of technological innovation and effectiveness.

“Cognitive workers not only produce current output but also invent new things, engage in discoveries and generate the technological progress that boosts future productivity.”

In the past, gains in productivity due to technology have not always been immediately discernible but rather have appeared after decades. But AI may prove a complete gamechanger, as ChatGPT, which added 100 million individuals to its platform in only 60 days, demonstrates. With AI in the hands of so many users, productivity increases could emerge more quickly. Another interesting consideration relative to productivity is that cognitive work proves more difficult to quantify in GDP data, which more easily measures industrial output. This may result in “silent productivity growth” that isn’t captured in the usual economic statistics.

AI will significantly disrupt the labor market.

AI’s most disruptive effect will likely be on labor utilization, potential job displacement and income distribution. This technology will affect higher paid knowledge workers as well as lower wage employees. For example, experts predict that AI may replace most of the job roles of some 49% of today’s labor force.

“The rapid advances can have great benefits but may also lead to significant risks, so it is crucial to ensure that we steer progress in a direction that benefits all of society.”

Much of AI’s impact on the workforce will also depend on whether it is a “complement or substitute for labor.” Policy officials will need to address the adverse aspects of job displacement with reformed social and tax policies.

About the Authors

Martin Neil Baily is a senior fellow emeritus in economic studies at the Brooking Institution’s Center on Regulation and Markets, where Anton Korinek is a fellow. Erik Brynjolfsson is the director of the Stanford Digital Economy Lab and a professor at the Stanford Institute for Human Centered AI.

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