ARTIFICIAL intelligence (AI) has long been theorised as a cure for the West’s ailing productivity growth. As the McKinsey Global Institute has shown, workplace productivity growth has been stagnant for about 40 years. But the discourse on the productivity effects of AI has been almost entirely speculative. Until recently, evidence of large-scale exposure to AI was absent from data.

In the last 10 years, scholars such as Daron Acemoglu and David Autor have shown how computerisation has led to an intra-firm re-allocation of skills and corresponding wage premiums via skill-biased technological change. Acemoglu and Pascual Restrepo showed that the equilibrium impact of industrial robots between 1990 and 2007 in the US reduced wages and employment in the local labour market.

However, the extent of these effects, as well as the question of whether they boosted productivity at the industry level, is a matter of debate. Thomas Phillippon, a French economist, has suggested that some of these productivity gains led to organisational splits between management and worker wages.