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Study shows that AI will not kill your business, but it can make it stronger

Study shows that AI will not kill your business, but it can make it stronger

A study conducted at the European Central Bank Conference found that AI can help a company thrive on the long run if it survives the disruption caused by artificial intelligence.

The authors of the study, who used survey data and data from the U.S. Census Bureau for the years 2017-2021, found that early adopters in the manufacturing industry saw their productivity decline as they replaced humans with robots.

The findings of the researchers contradict the prevailing narrative that AI increases productivity and "augments", rather than automates, many jobs.

Kristina MacElheran, a co-author of the paper and a speaker at the conference, said: "In the short run, we see many pains."

She explained that the decrease in productivity was a result of AI interfering on established manufacturing practices such as maintaining low inventories.

As time went on, these companies began to outperform their competitors in terms of sales, productivity, and employment, provided they were able to survive the turmoil.

McElheran said, "Surviving seems to be part of the issue," a researcher from the University of Toronto.

She said that this recovery does not happen in older companies which are also larger and "struggle" to achieve this.

McElheran, along with his colleagues, studied a sample of 30 000 firms where AI adoption increased from 7.5% to 9% over the period of study.

ECB President Christine Lagarde said earlier that between 23% and 29 percent of European workers were highly exposed AI. However, this did not have to herald a 'job apocalypse' because new jobs would be created as old ones were destroyed. (Reporting By Francesco Canepa Editing by Tomasz Janowski)

(source: Reuters)