AI Adoption: A Rocky Road to Long-term Gains

A study presented at a European Central Bank conference reveals that companies initially suffer productivity drops upon adopting AI, but eventually experience growth in sales, productivity, and employment. Early adopters in manufacturing saw short-term disruptions, but those who persisted thrived in the long run.

Companies integrating artificial intelligence (AI) into their operations may face initial setbacks, but long-term benefits await those who endure the turbulence, according to a study presented at a European Central Bank conference.

The research showed that while early AI adopters in the manufacturing sector experienced productivity declines, ultimately, they gained advantages in sales growth, productivity, and employment.

Researcher Kristina McElheran explained that initial disruptions occur as AI alters established practices, but those who successfully navigate these challenges are rewarded with improved performance across the board.

(With inputs from agencies.)