AI's Productivity Boost: A Game Changer for Businesses

In an era where artificial intelligence (AI) is rapidly transforming industries, a recent claim by a Path CEO has caught the attention of businesses worldwide: "1 role has the productivity of 4." This statement underscores the potential of AI to revolutionize workforces and drive significant productivity gains. As CEOs increasingly invest in AI, understanding the implications of this productivity boost is crucial for businesses to adapt and thrive in the coming years.



According to the 2024 KPMG CEO Outlook, 64% of global CEOs indicated they would invest in AI regardless of the state of the economy, signaling the importance of technology in driving innovation and growth. This commitment to AI is reflected in the 2024 Gartner CEO and Senior Business Executive Survey, where 34% of CEOs selected AI as the technology that would most significantly impact their industry. The depth and extent of CEOs' interest in AI are notable, with the portion of CEOs naming AI as the technology that would most significantly impact their industry nearly tripling between 2023 and 2024.

The promise of generative AI has some CEOs eyeing increased efficiency—and a leaner workforce. One out of every four of the 4,702 executives polled in PwC's 27th Annual Global CEO Survey said they plan to reduce headcount by 5% or more in 2024 due to generative AI. However, CEOs who view AI primarily as a way to accomplish the same tasks with fewer workers may be at risk of winning the cost battle but losing the growth war. They could end up sacrificing a critical component of reinvention: innovation.

Technology CEOs are taking a different tack, with 24% planning to grow their workforce to capitalize on the technology. This approach signals that tech leaders understand the disruptive potential of generative AI and view it as a means to create value in new ways, rather than just increasing efficiency. It also suggests that the tech industry may be applying lessons learned from its experience adopting other forms of AI.

To derive maximum value from AI, businesses should focus on upskilling their workforce and refocusing worker roles on innovation, ideas, and creativity. Upskilling everyone, from the C-suite to frontline workers, helps raise the baseline expectation for everyone and avoids creating siloed pockets of capability. Flexible training curricula should encourage safe experimentation, centering at first on small and secure ways to improve outcomes.

Refocusing worker roles on innovation, ideas, and creativity ensures that employees are not replaced by others who understand the technology better. Constant innovation and iteration from all members of the workforce will become increasingly crucial as companies face growing pressure to reinvent the way they do business.

Building the right IT function is also essential. The IT function needs to be a first mover within an enterprise, with new roles such as prompt engineers and rapidly implementing IT-specific use cases for generative AI that go beyond boosting efficiency to addressing priorities like productivity, profitability, and new products.

The productivity boost expected from AI adoption is anticipated to significantly influence the return on investment (ROI) for companies. According to the 2024 Gartner CEO and Senior Business Executive Survey, 34% of CEOs selected AI as the top technology that would most significantly impact their industry, reflecting the high expectations for AI's disruptive potential. CEOs are optimistic about the impact of AI on revenue, with 86% believing that AI can help maintain or grow company revenue in the next two years.

However, the long-term financial implications of AI adoption are not solely dependent on productivity gains. Companies must also consider the potential for AI to create new opportunities for innovation, human creativity, and productivity. According to the IBM Institute for Business Value study, 64% of CEOs believe that succeeding with generative AI will depend more on people's adoption than the technology itself. This suggests that the long-term financial implications of AI adoption will be influenced by how well companies can integrate AI into their workforce and culture.

In conclusion, the productivity boost from AI adoption is expected to significantly influence the ROI for companies, with potential long-term financial implications depending on how well they can integrate AI into their workforce and culture, as well as their ability to create new opportunities for innovation and growth. By focusing on upskilling, refocusing worker roles, and building the right IT function, businesses can adapt to the changes brought about by AI and thrive in the era of increased productivity.