Tools & Platforms
MIT Study Shows Drop in Productivity for U.S. Manufacturers After AI Adoption, Followed by Long-Term Gains
Insider Brief
- A new MIT-backed study using U.S. Census Bureau data reveals that AI adoption in manufacturing leads to early productivity setbacks before delivering long-term growth gains.
- Researchers found a consistent “J-curve” trajectory: initial performance declines of up to 60 percentage points followed by improvements in productivity, revenue, and market share.
- The effect is most pronounced in older firms with legacy systems, while younger, digitally mature companies recover faster and benefit sooner from AI integration.
The U.S. manufacturing sector is seeing early setbacks but long-term gains from artificial intelligence adoption, according to a new study backed by data from the U.S. Census Bureau and led by researchers at MIT.
The research, funded in part by MIT’s Initiative on the Digital Economy, finds that firms introducing AI tools often suffer an initial decline in productivity, output, and other performance indicators before rebounding with stronger growth. This pattern forms what researchers call a “J-curve,” where disruption precedes benefit. Despite the early downturn, the study identifies measurable long-term improvements in productivity, revenue, and employment, according to MIT.
“AI isn’t plug-and-play,” noted University of Toronto professor Kristina McElheran, a digital fellow at the MIT Initiative on the Digital Economy and one of the lead authors of the new paper “The Rise of Industrial AI in America: Microfoundations of the Productivity J-Curve(s).” “It requires systemic change, and that process introduces friction, particularly for established firms.”
The study draws on data from tens of thousands of U.S. manufacturing firms in 2017 and 2021, sourced from official Census Bureau surveys. Researchers from the University of Toronto, University of Colorado Boulder, Stanford University, and the U.S. Census Bureau collaborated on the analysis and MIT pointed out researchers found that the J-curve effect was most pronounced in older and more established companies, where legacy systems and entrenched management practices created friction in the transition.
“Old firms actually saw declines in the use of structured management practices after adopting AI,” McElheran said. “And that alone accounted for nearly one-third of their productivity losses.”
In contrast, younger firms that had already integrated digital tools or data infrastructure showed fewer short-term losses and rebounded faster.
Across the board, AI adoption initially reduced productivity by an average of 1.33 percentage points, even after controlling for firm size, capital stock, and IT maturity. When correcting for selection bias—the fact that early adopters may have been more optimistic or better resourced—the short-term losses grew to as much as 60 percentage points.
Despite the early turbulence, the study found that AI-adopting firms eventually outpaced their peers in both productivity and market share. The strongest gains were concentrated in digitally mature firms that were better equipped to scale AI applications and reallocate resources strategically, researchers indicated. The study also found investments in automation technologies, such as industrial robotics, helped accelerate the recovery.
The findings offer a more nuanced view of AI’s economic impact. While public discussions often focus on the transformative potential of AI, the study shows that its integration into traditional industries involves costly and disruptive transitions. The results also help explain why AI-driven productivity gains at the macroeconomic level have been slow to appear, despite widespread investment and optimism.
The researchers caution that their analysis is limited by the four-year interval between the two survey waves, which may not capture more granular changes or sector-specific dynamics. In addition, newer forms of AI, such as generative models, were not a focus of the study and may follow different adoption patterns.
“Taken together, our findings highlight AI’s dual role as a transformative technology and catalyst for short-run organizational disruption, echoing patterns familiar to scholars of technological change,” the researchers pointed out.
Tools & Platforms
Developers turn to AI amid evolving market conditions

Developers are not only investing in technology but are also adjusting their overall strategies to navigate a competitive landscape. The report shows that 57% have diversified their portfolios to address economic uncertainty. An equal percentage are offering incentives, such as covering stamp duty costs, to facilitate transactions.
Sustainability is gaining prominence in development decisions. Nearly two thirds (63%) of those surveyed identified sustainability as a key factor for both developers and buyers.
“Developers have time and time again proven themselves to be agile and adaptive in the face of tough and fast evolving market challenges,” said Terry Woodley (pictured right), managing director of development finance at Shawbrook. “It’s no surprise to see developers increasingly making use of AI and wider technology, and shifting their priorities, to optimise business performance – and this will without doubt only become more commonplace as everyone tries to get ahead of the curve and get an edge on competitors.
“The government’s focus on housebuilding should also provide added impetus, and present opportunities for new, sustainable projects for developers to capitalise on. Speaking to a specialist lender could unlock new possibilities for those looking to accelerate their plans and future proof their business plans.”
Planning approvals in England have recently fallen to their lowest level in 13 years, fuelling doubts about the government’s ability to deliver 1.5 million new homes. Recent polling shows two-thirds of UK adults lack confidence in Labour’s housing target, while Savills has projected that the goal is unlikely to be met. In response, Prime Minister Keir Starmer introduced Extract, an AI assistant developed with Google, designed to digitise handwritten planning records and modernise the planning process.
Tools & Platforms
Heart Attack Prediction Enhanced by AI and Miniature Imaging

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Measurements with a miniature camera inside the coronary arteries can accurately predict whether someone will suffer a recurrent heart attack. Until now, interpreting these images was so complex that only specialized laboratories could perform it. A new study from Radboud University Medical Center shows that AI can reliably take over this analysis and rapidly assess arteries for weak spots.
A heart attack occurs when a coronary artery, which supplies the heart with blood, is blocked by a blood clot. This can occur when atherosclerosis causes artery narrowing, resulting in the heart receiving too little oxygen. Treatment typically involves angioplasty, where a cardiologist widens the artery with a small balloon, usually followed by the placement of a tiny tube, called a stent. In the Netherlands, this procedure is performed about 40,000 times per year.
Predicting recurring events
Nevertheless, about fifteen percent of patients who suffer from a heart attack experience another event within two years. To better identify vulnerable spots within the artery that can trigger new infarctions, technical physician Jos Thannhauser and physician Rick Volleberg of Radboudumc, together with their team, conducted a study. They analyzed the coronary arteries of 438 patients using a miniature camera and a specially developed AI, and followed these patients for two years.
The study shows that AI detects vulnerable spots in the arterial wall just as well as specialized laboratories—the international gold standard—and even predicts new infarctions or death within two years more accurately. What does this mean for patients? Volleberg explains: “If we know who has high-risk plaques and where they are located, we may in the future be able to tailor medication or even place preventive stents.”
Looking inside the artery wall
The miniature camera uses a technique called optical coherence tomography (OCT). Inserted through the arm into the bloodstream, it captures images of arteries using near-infrared light, visualizing the vessel wall at microscopic resolution.
“This technique is already used in clinical practice to guide angioplasty and to check whether a stent has been placed correctly”, explains Thannhauser. “It has been shown that OCT reduces the risk of new infarctions and complications. But in those cases, physicians only look at a very small part of an artery—the site of the infarction. Our study shows that this technique, combined with AI, has much greater potential to map entire vessels.”
Towards clinical application with AI
“One of the challenges with this technique is that it is extremely difficult for physicians to interpret OCT images,” says Thannhauser. That’s not surprising—each procedure produces hundreds of images. Even assessing just the stent placement is challenging. Analyzing entire coronary arteries produces far too many images to evaluate manually. “Currently, only a handful of specialized labs can interpret these images, and even they cannot review everything. Moreover, it’s too expensive and labor-intensive to implement this manually in routine clinical care.”
That is why Thannhauser’s team developed AI that can analyze all images reliably and much faster than humans. “AI can already assist physicians during stent placement with OCT,” Thannhauser explains. “Thanks to our AI, we are now a step closer to scanning entire coronary arteries for vulnerable spots in clinical practice. I do expect, however, that it will take a number of years before this becomes reality.”
Reference: Volleberg RHJA, Luttikholt TJ, van der Waerden RGA, et al. Artificial intelligence-based identification of thin-cap fibroatheromas and clinical outcomes: the PECTUS-AI study. Eur Heart J. 2025:ehaf595. doi: 10.1093/eurheartj/ehaf595
This article has been republished from the following materials. Note: material may have been edited for length and content. For further information, please contact the cited source. Our press release publishing policy can be accessed here.
Tools & Platforms
China is making AI education mandatory for kids – and it’s already rolling out in schools

Artificial intelligence is rapidly becoming part of our everyday routines. Whether it’s checking in with ChatGPT, using Face ID to unlock phones, or a subtle tweak to photos before sharing them online, AI is there behind the scenes.
With no sign of this slowing down, a school in China is moving quickly to prepare its pupils by making AI education compulsory.
In Hangzhou, Zhejiang province, authorities have introduced compulsory AI education for all primary and secondary students, aiming to get ahead of the curve and equip children with essential knowledge of the technology.
From this term, schools are reportedly expected to add at least 10 hours of AI lessons each academic year. They will have the flexibility to decide how to deliver the content – whether through an intensive week-long course or by integrating AI topics across different science and technology classes, according to South China Morning Post.
The new curriculum sets out a step-by-step approach to AI education, gradually building students’ skills from the earliest years of school.
In the first two years of primary, children will be introduced to AI through familiar tech, like smart speakers or facial recognition, and taught the basics of responsible use, with an emphasis on privacy.
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By Years 3 and 4, they’ll begin using AI tools to collect and combine text, images and audio for simple projects, applying the technology to everyday tasks. Years 5 and 6 go deeper, with students learning about core concepts like decision trees, neural networks and basic algorithms.
In middle school, the focus shifts to real-world applications. Students will work through the full AI workflow, from data preparation to model training, and learn to evaluate technologies like generative AI.
By high school, the curriculum becomes project-based. Pupils will design their own AI systems and intelligent agents, applying what they’ve learnt to practical challenges.
Though still early in its rollout, the programme reflects China‘s wider goal to lead in AI – starting by making it second nature for the next generation.
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