[[{“value”:”The differences between the most and least productive companies can be startlingly high. By one estimate, in the US alone the most productive firms in a sector can be more than two to four times more cost-effective than the least productive ones. Given the size of those discrepancies, any expansion of trade or innovation that makes
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The differences between the most and least productive companies can be startlingly high. By one estimate, in the US alone the most productive firms in a sector can be more than two to four times more cost-effective than the least productive ones. Given the size of those discrepancies, any expansion of trade or innovation that makes it possible to replace less efficient producers could help a sector economize a significant part of its production costs.
That is from my latest Bloomberg column. And this:
There is a converse worry about efficiency changing an economy too quickly — such as the current panic in some quarters over the speed of change that AI might bring.
What I see, however, is that a lot of institutions are unwilling or unable to adopt new, AI-intensive methods of doing business. Another year or two of prodding probably will not change that reality. Then, as AI becomes more important as a competitive edge, firms that do not deploy AI effectively will go out of business. This process could take 10 years or more, coming in fits and spurts, as has happened with most previous major technological innovations.
The column also has other points of interest.
The post It is wonderful to put inefficient firms out of business appeared first on Marginal REVOLUTION.
Economics
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