AI Fuels UK Productivity Growth, But Mostly in Development Sectors

A new study by Bank of England staff has found evidence that artificial intelligence (AI) is contributing to UK productivity growth, but mostly in sectors related to AI development rather than adoption.

The research, conducted by Sandra Batten, used data from the Office for National Statistics (ONS) and analyzed the impact of generative AI on various industries. The study found that computer programming and consultancy experienced a significant increase in productivity, with its share of yearly growth multiplying tenfold across two periods compared.

Other sectors, such as administrative and business support services, also showed improvements, while manufacturing made a moderate contribution. However, the finance sector, which is heavily invested in AI, saw a negative impact on productivity.

The study suggests that the UK may be following the same path as during the computing revolution, where gains were first seen among firms producing semiconductors and hardware, followed by industries using them. The researchers caution that this is just correlation and not causation, emphasizing that more research is needed to understand the relationship between AI adoption and productivity.