Artificial Intelligence – impact on total factor productivity, e-commerce & fintech

The idea that Artificial Intelligence will be one of the foremost sources of innovation in years to come is one that goes well beyond the field of academia. One relevant issue in this connection is understanding the likely impact of these technologies on productivity. Indeed, the impacts of earlier introductions of disruptive technology in history – such as the industrial revolution and the mechanisation of agriculture – suggest that the automation of existing tasks can produce extraordinary increases in productivity (Acemoglu & Restrepo, 2019). To assess the growth potential of this new wave of innovation, in this study we examine the impact of AI technologies on total factor productivity. This involves analysing improvements in productivity by firms who have patented AI technologies. In particular, we exploit a novel dataset of AI patents at firm level, to analyse whether the extent to which firms develop AI technologies positively affects productivity and wages. Also, we draw attention to two sectors that are more extensively adopting AI – e-commerce and fintech firms.