Griffin on Tech: Using tech, making tech and the productivity dilemma

As the Herald reported yesterday, our national productivity continues to sag, continuing a worrying decades-long trend.

According to Statistics New Zealand, labour productivity rose by an average of 0.2% between 2019 and 2023, but the capital productivity index fell by an average of 1.2 per cent, and its multifactor productivity index fell by an average of 0.4 per cent a year.

We are going backwards in terms of the return we get from the effort we put in. i’ve spent most of the year writing about productivity, and artificial intelligence, and the promise that the latter will boost the former. 

AWS issued yet another survey this week suggesting employers think they can boost productivity by half thanks to AI and will pay a wage premium of 30% or more for AI-savvy workers.

NZIER’s recent economic studies for both Spark and ASB add credence to the claims that investing in advanced technologies will boost productivity. But the more I explore the country’s productivity paradox, the more I tend to agree with Council of Trade Unions economist Craig Renney, who told the Herald that the nature of our key industries is a barrier to productivity growth.

“It’s very hard to get an extra litre of milk out of a cow, or an extra metre of timber out of a tree. But it’s really easy to get additional productivity growth out of IT, or out of financial services,” he said.

Which is why we should have pivoted much sooner to the weightless economy, developing and shipping software and IT services to the world, building a highly-paid workforce in the process. Using tech to make us more efficient has great benefits, but making tech to sell to the world is the real key to becoming more productive as the knowledge economy inherently has more scope for productivity improvements.

In the same Herald article, Dave Heatley, an economic consultant who worked at the Productivity Commission up until 2021, called out overly restrictive regulations as stifling productivity growth. The coalition government has quickly moved to slash red tape, much to the relief of industry, and the horror of environmentalists.

Heatley put our reasonable productivity growth (1.8%) between 1997 and 2000 down to the advent of the internet and wider availability of computers. So does he see artificial intelligence providing a similar boost? Nope.

“AI has a long history of over-promising and under-delivering,” he told the Herald.

I disagree with him. The current incarnation of generative AI systems have huge scope to boost productivity immediately in white-collar professions. I’h hearing evidence that it is being used to great effect already as I talk to businesses, in the tech sector and beyond. Someone told me recently that we should look to the evolution of AI code generation tools to see where multimodal AI will go next, which is having a more fundamental impact on our work, the way the likes of Githut CoPilot, and AutoGen have done in software development.

But Heatley is right about AI failing to live up to the promises to date, so the next year will be crucial in proving the generative AI value proposition as businesses move out of experimentation mode and look to deploy AI tools and draw on large language models.

Speaking of new tech, I went hands-on at Wellington game development studio Beyond with the Apple Vision Pro this week, and came away very impressed. Will using one of these expensive mixed-reality headsets boost your productivity? Maybe. I loved wearing the headset to multitask, though I could only imagine doing it for short stints of time. Apple is clearly targeting professionals with its headset, replicating productivity apps in the VisionOS, and talking up the prospect of using its headsets to examine and interact with digital twins.

The Vision Pro is a great first-generation device that raises the bar for the entire VR/AR industry. Here’s my summary of its key pros and cons:

Test-driving the Vision Pro at Beyond.

The good:
✅ Resolution of the OLED screens, it's the best I’ve experienced in a headset
✅ The learning curve isn’t huge - VisionOS is very intuitive and easy to use and the pinch and swipe gestures to navigate it really work.
✅ The way Vision Pro incorporates multiple sources of content (games, video, apps) in your mixed reality environment is very impressive.

The not so good:
❌ A bit of noticeable motion blur when you move your head quickly
❌ The battery pack - limited to around 2 hours of battery life and you need to carry it with you when standing and moving around
❌ The price tag US$3,499 + accessories puts it in the realm of the well-heeled.

By the way, you can check out the latest episode of The Business of Tech to find out more about Beyond’s game Runaways, the first New Zealand game to be tailor-made for the Vision Pro.