Could AI wipe out middle management?
To actually make a difference, AI must tackle its problem's weakest link. For corporate structures, this could well mean middle management.
The "weak links" theory suggests that technological advancements often have limited impact on overall productivity until they permeate an entire system. This theory explains why despite significant technological disruption over the past 150 years, American economic growth has remained relatively stable at around two percent per year.
For example, the shift from steam to electricity in manufacturing initially replaced central steam engines with electric motors, but factories still largely relied on the same layout with long leather belts connecting machines to the central power source. It wasn't until electricity diffused throughout factories and powered individual machines that factories could be reorganized around workflow, leading to greater flexibility, efficiency, and safety, paving the way for modern mass production.
The implication is that AI's impact on the economy may not be as dramatic as some anticipate. While AI can improve specific aspects of knowledge work, it may take time for the technology to permeate the entire economy and transform the remaining weak links. Until then, the overall productivity gains may be incremental, with the economy continuing to grow at roughly two percent per year.
Written by urgent.news from City AM's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
