The difference between the most productive and the least productive companies can be incredibly high. On average, in the US alone the most productive firms in a sector may have two to four times the costs of the least productive ones. Given the magnitude of that disparity, any trade expansion or innovation that makes it possible to close inefficient producers can help the sector save a significant portion of its production costs.
That’s from my latest column for Bloomberg. And this:
There are renewed concerns about the efficiency of changing the economy too quickly – such as the current panic in some areas over the speed of change that AI can bring.
What I see, however, is that many institutions are unwilling or unable to adopt new, AI-based ways of doing business. Another year or two of production probably won’t change that fact. Then, as AI becomes more important as a competitive edge, firms that don’t deploy AI effectively will go out of business. This process can take 10 years or more, and it can happen quickly, as it has with many technological innovations in the past.
The column has some interesting points.
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