AI as an Innovation in the Method of Innovation: Implications for Productivity Growth

cation technologies (ICT) have historically reshaped production possibilities and transformed macroeconomic performance. Artificial intelligence (AI), and in particular recent advances in generative and predictive models, appears to share these characteristics: broad applicability, rapid improvement, complementarity with other technologies, and the capacity to reorganize production at scale. This paper develops and implements a measurement framework for evaluating AI’s contribution to labor productivity growth. We view AI both as a GPT and an innovation in the method of innovation (IMI) that raises the efficiency of intangible asset creation. Intangibles—software, data assets, R&D, organizational capital, brand and marketing assets (following Corrado, Hulten, and Sichel 2009) — play a central role in innovation and organizational change in modern economies (Corrado et al. 2022), suggesting that the capacity for these assets to propagate productivity improvements through their economy-wide use is substantial.