Study from Germany

AI increases productivity – without job losses

AI systems are causing upheaval in the world of business.(Bild: Deemerwha studio)

Hopes for a new AI economic miracle: According to a study, artificial intelligence (AI) can significantly increase the productivity of the economy without leading to job losses.

According to the study, annual productivity growth of 0.9% can be expected in Germany between 2025 and 2030, and even 1.2% between 2030 and 2040, according to a projection by the Cologne Institute for Economic Research (IW).

In the 2020s, only 0.4 percent has been achieved so far. However, the decade to date has also been overshadowed by many crises - such as the coronavirus pandemic or high energy prices following the Russian attack on Ukraine.

For Helena Melnikov, Managing Director of the German Chamber of Industry and Commerce (DIHK), the economic crisis is homemade. "But there are currently also great opportunities to improve things in concrete terms. This applies above all to the rapid technological developments that we need to make greater use of." This applies in particular to AI. However, the study states that a "productivity miracle" is not realistic. Even with positive AI effects, it would only be possible to return to the level of the 2000s, which has not been particularly good historically.

The IW researchers emphasized that there could be productivity gains in individual jobs - particularly in terms of costs and time savings. However, this is not automatic. Companies and employees would also have to go along with it. "The empirical evidence suggests that AI has largely complemented human work so far." However, individual employee skills are less needed. Specific training for a particular job or task is necessary.

The topic of energy
The IW Institute, which is close to employers, is calling on politicians to create better framework conditions for greater use of AI. In order to support private investment, tax breaks and a reduction in bureaucracy are needed, as well as faster planning and approval procedures. AI data centers need more renewable energy. Legal certainty is also required for regulation. Start-ups need to be supported. They are often a driver of innovation. There must be further training measures on the labor market and immigration in this area.

Germany ranks eleventh above the EU average when it comes to the introduction of AI in companies. The leaders in Europe are Denmark, Finland and the Netherlands. In terms of research and the number of supercomputers required, Germany occupies a leading position, but falls far behind in the OECD comparison of industrialized countries in terms of data availability and reuse, ranking 24th. According to the study, the potential has not yet been sufficiently exploited.

In an Allensbach survey for the Federation of German Industries (BDI), 70 percent of the 274 companies surveyed with at least 250 employees stated that the state must above all renovate and expand the digital infrastructure in order to promote innovation. They also called for a reduction in bureaucracy (46%) and more foreign skilled workers (40%).

More targeted funding
"The future German government must link research, funding programs and start-up funding in a more targeted manner," said BDI expert Iris Plöger. "The research allowance must be extended and the goal of investing 3.5 percent of gross domestic product in research and innovation must be driven forward with determination." Key technologies such as quantum technology need targeted support.