With the new quarter, and the halfway point of 2026, the Piton Investment Team is busy with updates for Piton clients, but they did make time to share a research report that intrigued them in their preparations. It’s an economic report from the Federal Reserve Bank of St. Louis, “AI and Productivity Growth: Evidence from Historical Developments in Other Technologies.” Although the report is more than two years old now, the perspective still seemed valuable to the team. Productivity is a key metric that the team monitors, and the report points out that Aggregate Productivity Growth from 2000-2019 (1.12%) has averaged scarcely half that of the average over the previous seventy years (2.04%). Arguably, then, there is room for more growth now and leads to the question of whether, or how much, AI can fuel or enable productivity growth. For perspective, the report compares the rate of adoption of other technologies (personal computers, smart devices, cloud computing, and 3D printing), each of which have had rather different rates of diffusion among businesses. The report summarizes, “Despite popular interest in the productive potential of workplace AI and concerns that it may displace workers, early evidence on the diffusion of AI seems to suggest a pattern similar to those of personal computers and cloud computing,” which would mean we are in the early years of what will be robust growth for more than a decade. This is consistent with the team’s general stance to date, that the strongest opportunities now are in the services that enable AI adoption, while we are still early in the learning curve as to what sectors and businesses will benefit most from AI implementation. Piton clients can be sure that the Piton Investment Team will keep a keen eye on developments to be ready to lean into those opportunities when they arise.
Read the full report here.