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Does AI actually boost productivity? The evidence is murky

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There’s been much talk recently – especially among politicians – about productivity. And for good reason: Australia’s labour productivity growth sits at a 60-year low.

To address this, Prime Minister Anthony Albanese has convened a productivity round table next month. This will coincide with the release of an interim report from the Productivity Commission, which is looking at five pillars of reform. One of these is the role of data and digital technologies, including artificial intelligence (AI).

This will be music to the ears of the tech and business sectors, which have been enthusiastically promoting the productivity benefits of AI. In fact, the Business Council of Australia also said last month that AI is the single greatest opportunity in a generation to lift productivity.

But what do we really know about how AI impacts productivity?

What is productivity?

Put simply, productivity is how much output (goods and services) we can produce from a given amount of inputs (such as labour and raw materials). It matters because higher productivity typically translates to a higher standard of living. Productivity growth has accounted for 80% of Australia’s income growth over the past three decades.

Productivity can be thought of as individual, organisational or national.

Your individual productivity is how efficiently you manage your time and resources to complete tasks. How many emails can you respond to in an hour? How many products can you check for defects in a day?

Organisational productivity is how well an organisation achieves its goals. For example, in a research organisation, how many top-quality research papers are produced?

National productivity is the economic efficiency of a nation, often measured as gross domestic product per hour worked. It is effectively an aggregate of the other forms. But it’s notoriously difficult to track how changes in individual or organisational productivity translate into national GDP per hour worked.

AI and individual productivity

The nascent research examining the relationship between AI and individual productivity shows mixed results.

A 2025 real-world study of AI and productivity involved 776 experienced product professionals at US multinational company Procter & Gamble. The study showed that individuals randomly assigned to use AI performed as well as a team of two without. A similar study in 2023 with 750 consultants from Boston Consulting Group found tasks were 18% faster with generative AI.

A 2023 paper reported on an early generative AI system in a Fortune 500 software company used by 5,200 customer support agents. The system showed a 14% increase in the number of issues resolved per hour. For less experienced agents, productivity increased by 35%.

But AI doesn’t always increase individual productivity.

A survey of 2,500 professionals found generative AI actually increased workload for 77% of workers. Some 47% said they didn’t know how to unlock productivity benefits. The study points to barriers such as the need to verify and/or correct AI outputs, the need for AI upskilling, and unreasonable expectations about what AI can do.

A recent CSIRO study examined the daily use of Microsoft 365 Copilot by 300 employees of a government organisation. While the majority self-reported productivity benefits, a sizeable minority (30%) did not. Even those workers who reported productivity improvements expected greater productivity benefits than were delivered.

Prime Minister Anthony Albanese has convened a productivity round table in August.
Lukas Coch/AAP

AI and organisational productivity

It’s difficult, if not impossible, to attribute changes in an organisation’s productivity to the introduction of AI. Businesses are sensitive to many social and organisational factors, any one of which could be the reason for a change in productivity.

Nevertheless, the Organisation for Economic Co-operation and Development (OECD) has estimated the productivity benefits of traditional AI – that is, machine learning applied for an industry-specific task – to be zero to 11% at the organisational level.

A 2024 summary paper cites independent studies showing increases in organisational productivity from AI in Germany, Italy and Taiwan.

In contrast, a 2022 analysis of 300,000 US firms didn’t find a significant correlation between AI adoption and productivity, but did for other technologies such as robotics and cloud computing. Likely explanations are that AI hasn’t yet had an effect on many firms, or simply that it’s too hard to disentangle the impact of AI given it’s never applied in isolation.

AI productivity increases can also sometimes be masked by additional human labour needed to train or operate AI systems. Take Amazon’s Just Walk Out technology for shops.

Publicly launched in 2018, it was intended to reduce labour as customer purchases would be fully automated. But it reportedly relied on hiring around 1,000 workers in India for quality control. Amazon has labelled these reports “erroneous”.

More generally, think about the unknown number (but likely millions) of people paid to label data for AI models.

A shopfront on a city street.

Amazon’s Just Walk Out technology intended to reduce labour as customer purchases would be fully automated.
John G. Mabanglo/EPA

AI and national productivity

The picture at a national level is even murkier.

Clearly, AI hasn’t yet impacted national productivity. It can be argued that technology developments take time to affect national productivity, as companies need to figure out how to use the technology and put the necessary infrastructure and skills in place.

However, this is not guaranteed. For example, while there is consensus that the internet led to productivity improvements, the effects of mobile phones and social media are more contested, and their impacts are more apparent in some industries (such as entertainment) than others.

Productivity isn’t just doing things faster

The common narrative around AI and productivity is that AI automates mundane tasks, making us faster at doing things and giving us more time for creative pursuits. This, however, is a naive view of how work happens.

Just because you can deal with your inbox more quickly doesn’t mean you’ll spend your afternoon on the beach. The more emails you fire off, the more you’ll receive back, and the never-ending cycle continues.

Faster isn’t always better. Sometimes, we need to slow down to be more productive. That’s when great ideas happen.

Imagine a world in which AI isn’t simply about speeding up tasks but proactively slows us down, to give us space to be more innovative, and more productive. That’s the real untapped opportunity with AI.



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Trump threatens 35% tariffs on Canadian goods

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US President Donald Trump has said he will slap a 35% tariff on Canadian goods starting 1 August, even as the two countries are days away from a self-imposed deadline to reach a new deal on trade.

The missive came as Trump also threatened blanket tariffs of 15% or 20% on most trade partners, and said he would soon notify the European Union of a new tariff rate on its goods.

Trump announced the latest levies on Canada on Thursday in a letter posted to social media and addressed to Prime Minister Mark Carney.

The US has already imposed a blanket 25% tariff on some Canadian goods, and the country is feeling the pain of the Trump administration’s global steel, aluminium and auto tariffs.

The letter is among more than 20 that Trump had posted this week to US trade partners, including Japan, South Korea and Sri Lanka.

Like Canada’s letter, Trump has vowed to implement those tariffs on trade partners by 1 August.

The US has imposed a 25% tariff on all Canadian imports, though there is a current exemption in place for goods that comply with a North American free trade agreement.

It is unclear if the latest tariffs threat would apply to goods covered by the Canada-United States-Mexico Agreement (CUSMA).

Trump has also imposed a global 50% tariff on aluminium and steel imports, and a 25% tariff on all cars and trucks not build in the US.

He also recently announced a 50% tariff on copper imports, scheduled to take effect next month.

Canada sells about three-quarters of its goods to the US, and is an auto manufacturing hub and a major supplier of metals, making the US tariffs especially damaging to those sectors.

Trump’s letter said the 35% tariffs are separate to those sector-specific levies.

“As you are aware, there will be no tariff if Canada, or companies within your country, decide to build or manufacture products within the United States,” Trump stated.

He also tied the tariffs to what he called “Canada’s failure” to stop the flow of fentanyl into the US, as well as Canada’s existing levies on US dairy farmers and the trade deficit between the two countries.

“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter. These Tariffs may be modified, upward or downward, depending on our relationship with Your Country,” Trump said.

President Trump has accused Canada – alongside Mexico – of allowing “vast numbers of people to come in and fentanyl to come in” to the US.

According to data from the US Customs and Border Patrol, only about 0.2% of all seizures of fentanyl entering the US are made at the Canadian border, almost all the rest is confiscated at the US border with Mexico.

In response to Trump’s complaints, Canada announced more funding towards border security and had appointed a fentanyl czar earlier this year.

Canada has been engaged in intense talk with the US in recent months to reach a new trade and security deal.

At the G7 Summit in June, Prime Minister Carney and Trump said they were committed to reaching a new deal on within 30 days, setting a deadline of 21 July.

Trump threatened in the letter to increase levies on Canada if it retaliated. Canada has already imposed counter-tariffs on the US, and has vowed more if they failed to reach a deal by the deadline.

In late June, Carney removed a tax on big US technology firms after Trump labelled it a “blatant attack” and threatened to call off trade talks.

Carney said the tax was dropped as “part of a bigger negotiation” on trade between the two countries.

The Prime Minister’s office told the BBC they did not have immediate comment on Trump’s letter.



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The Stack: How AI Is Driving Rapid Change in Business

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This week’s column dives into Mary Meeker’s latest report, and also looks at how Road Runner Sports is elevating its customer experience
This story is part of “The Stack,” a weekly column that takes a deep dive into the ways tech companies are shaping the future of fitness and wellness

I was surprised to see an email in my inbox about a new report from Bond, the venture capital firm based in San Francisco and founded by Mary Meeker. Following the link brought me to a massive 340-page report. It was like Christmas in July.

If you don’t know, Meeker is known as the “Queen of the Internet.” While at Morgan Stanley, Meeker and Chris DePuy published “The Internet Report,” which guided investors through the dot-com boom era and beyond. So, what does she and her co-authors of “Trends – Artificial Intelligence” have to say today? A lot.

The report covers everything from soup to nuts, and includes chapters on AI deployment, usage, costs, growth, the competitive landscape, capital expenditures and IRL uses such as at work.  

The report paints an AI landscape using numerous graphs and charts, mostly festooned with arrows that go up, but also with some bleak data points such as “monetization threats.”

One of the key takeaways of the report is the speed of change occurring.

“To say the world is changing at unprecedented rates is an understatement,” the report’s authors said. “Rapid and transformative technology innovation/adoption represent key underpinnings of these changes. As does leadership evolution for the global powers.”

The report noted the rise of Google, Alibaba and Facebook – each experiencing growth arcs that were relatively steady.

“Fast forward to today with the world’s organized, connected and accessible information being supercharged by artificial intelligence, accelerating computing power and semi-borderless capital … all driving massive change,” the authors of the report said. “Sport provides a good analogy for AI’s constant improvements. As athletes continue to wow us and break records, their talent is increasingly enhanced by better data/inputs/training. The same is true for businesses, where computers are ingesting massive datasets to get smarter and more competitive.”

Over time, the speed of change is only expected to increase, so hang on.

If you want to learn more, download the report here

The New Kid on the Block

The latest development in AI is “Agentic AI,” which is the spooky one that works autonomously with little human oversight. Instead, it runs on its own to reach specific goals. This form of AI joins the ranks of other powerful models, such as predictive and generative AI. In truth, Agentic AI is not so much spooky as it is advanced.

For the retail, hospitality and fitness industries, companies such as Profitmind are working with businesses to create an “intelligence layer” with Agentic AI that can assist in price optimization, performance analysis and inventory analysis. It can even be used in competitive and white space analysis.

SalesRevv, a software platform for fitness brands, uses agentic AI in text messages (credit: SalesRevv)

In IBM’s latest “Global C-suite Series” report, analysts polled CEOs and looked at how Agentic AI can help businesses move from profitability to greater productivity. 

“Technology promises to help them make smarter, better decisions that drive growth and stakeholder value,” the report’s authors said. “AI agents, in particular, offer predictive capabilities that let teams see the impact of change before they lift a finger. This autonomous, adaptive and self-iterating technology is already dramatically changing how businesses operate.”

Business leaders are taking note. IBM’s survey of executives found that 61 percent of CEOs polled “say their organization is actively adopting AI agents and preparing to implement them at scale.”

Tying Everything Together

Road Runner Sports, the nationwide fitness retailer, recently teamed up with unified commerce solutions leader Aptos to implement the tech company’s modern, mobile-first Point of Sale (POS) platform, Aptos One. This strategic deployment, extending across Road Runner Sports’ 50-plus U.S. stores, aims to significantly enhance customer engagement and omnichannel capabilities.

Deploying Aptos One is in response to growing consumer demands for an overall better shopping experience, whether it is online, in a physical store or at a pop-up shop. Personalization and seamless experiences are key.

Aptos said the integration of Aptos One will seamlessly connect with Road Runner Sports’ existing Aptos SaaS applications, including Merchandising, Order Management System (OMS), Customer Relationship Management (CRM) and Sales Audit. The company said this connectivity will enable highly personalized customer service, real-time inventory visibility and a unified experience across online and offline interactions.

San Diego-based Road Runner Sports is renowned for its diverse selection of athletic shoes, apparel and fitness devices. Their shoppers are fiercely loyal and expect a high level of personalization. The company’s commitment to inspiring active and healthy lifestyles is exemplified by its unique Fit Finder technology, which provides in-store and online customers with personalized shoe fittings, and its popular membership program, offering extended guarantees and exclusive benefits. 

“We’ve redefined the traditional shoe buying experience,” Tom Compogiannis, chief financial officer at Road Runner Sports, said in a statement. “Our interest in Aptos One stemmed from our continuous pursuit of elevating our customers’ journey.”

exterior of a Road Runner Sports store
credit: Arne Beruldsen/shutterstock.com

Beyond in-store enhancements, Compogiannis foresees significant opportunities for Aptos One to facilitate Road Runner Sports’ presence at external events such as pop-up shops, expos and gatherings.

“We want to interact with Road Runner Sports customers and potential customers wherever they are,” Compogiannis added. “As a cloud-native, mobile-first solution, Aptos One makes it easy to conduct selling activities just about anywhere.”

This capability allows store teams to engage with local communities, expanding customer acquisition and sales opportunities outside traditional store environments.”

Jeremy Grunzweig, general manager at Aptos, emphasized that Aptos One was developed in response to retailer feedback, combining robust enterprise-grade, omnichannel POS functionality with a mobile-first design.

For inquiries and tips related to “The Stack,” please reach out to [email protected]





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Indeed and Glassdoor to Slash 1,300 Jobs As Parent Company Bets on AI

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Two major job-seeking platforms are slashing jobs.

Indeed and Glassdoor are laying off about 1,300 employees as their parent company, Japan’s Recruit Holdings, restructures its HR tech empire to double down on artificial intelligence.

In an internal email to employees on Thursday viewed by Business Insider, Recruit Holdings and Indeed CEO Hisayuki “Deko” Idekoba said that the cuts would mostly affect US-based roles in research, people operations, and sustainability, because “AI is changing the world” and the company must adapt.

“Delivering on this ambition requires us to move faster, try new things, and fix what’s broken,” wrote Idekoba. “To achieve our company priorities, it requires creating a structure and culture to support them.”

“We will integrate Glassdoor operations into Indeed, working toward a simpler hiring experience for job seekers and employers,” Idekoba added in the email.

In addition to trimming around 6% of the HR Technology segment workforce, some long-running leaders across both companies will be departing. According to the email, Glassdoor CEO Christian Sutherland-Wong will be exiting the company on October 1 after a decadelong run. LaFawn Davis, Chief People & Sustainability Officer, will also be leaving Indeed in September.

The overhaul comes just weeks after Idekoba returned as CEO of Indeed, a role he previously held from 2013 to 2019.

“We’re in a once-in-a-generation moment when technology can really change lives,” Idekoba said in June in a press release. “Hiring is still too slow and too hard, and we’re using AI to make it simpler and more personal — for both job seekers and employers.

Recruit Holdings acquired Indeed in 2012 and Glassdoor in 2018. It is unclear if the cuts will be evenly distributed between Glassdoor and Indeed.

Indeed has had layoffs two years in a row. In 2024, it cut around 1,000 jobs, which was about 8% of its workforce. The year before, the company also cut 2,200, which was roughly 15% of its staff.

Indeed, Glassdoor, and Recruit Holdings declined to comment further beyond the CEO’s email.





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