Amid the serious labor shortage, coupled with a low potential growth rate, there are high expectations for raising productivity with artificial intelligence (AI). Under the crisis management and growth investment policies that the Prime Minister Sanae Takaichi administration is promoting, “AI/semiconductors” tops the list of 17 strategic sectors.
The quantitative economic impact of AI is a cutting-edge topic of interest studied by researchers around the world. While many studies have indicated that AI has a productivity-raising effect, the quantitative impact is far from reaching consensus, with U.S. and European estimates of annual rates of AI-derived productivity growth ranging widely from less than 0.1% to more than 1%. However, those figures have a significant effect on monetary and fiscal policies. Based on a recent survey of workers, I will boldly estimate AI’s quantitative effects on productivity growth in Japan.
The number of workers using AI for their work has more than doubled in the past year, exceeding 20%. However, the impact of AI on productivity cannot be measured merely by the number of AI users alone: it depends on how much of their total work AI is used for and how much efficiency has improved. In most cases, the share of tasks for which AI is used account for only a part of total working hours. There is concern that people may lose jobs due to substitution by AI, but many workers are benefiting from the labor-saving effects of AI and using the time saved for tasks that they could not have done otherwise.
The average productivity improvement effect, calculated by multiplying the rate of growth in each AI user’s task efficiency by the percentage of tasks for which AI is used, is 6%. Based on this figure, the level of labor productivity in the entire Japanese economy, including workers not using AI, is more than 1% higher than would be the case without AI.
What are the prospects for the future? Many workers are considering to start using AI for their work. Additionally, the productivity of workers who are already using AI will improve further due to the learning effect. Over the next several years, the expanding use of AI is estimated to raise labor productivity level by an annual rate of around 0.3%, meaning an additional increase of 0.1 percentage points compared with the rate of productivity growth in the past several years.
However, those figures reflect only AI’s labor-saving effect. It is also necessary to take into consideration AI’s effect of promoting the creation of innovative new products and services. Innovation is the driving force of productivity growth, and if AI raises the efficiency of research and development (R&D), the effects will be similar to those generated by an increase in the number of researchers. Indeed, R&D accounts for the largest share of work for which AI is used, and AI use is more pronounced in manufacturing industries—particularly in machinery industries, where R&D intensity is high—than in non-manufacturing industries. AI use in R&D work is expected to contribute an additional 0.1 percentage point or so to the annual growth rate of the productivity of the Japanese economy. If AI use in the R&D process becomes more widespread, the productivity-raising effect could grow even further.
Taken together, the current estimate is that productivity in Japan could increase by around 0.2 percentage points over the next several years due to the expansion of AI use. This figure may appear small, but in comparison with the current rate of less than 0.5% productivity growth, it represents a fairly large increase. Naturally, the figure does not represent policy effects and is merely the result of a mechanical calculation to assess the quantitative impact of AI made from limited information, and so involves considerable uncertainty. Moreover, it is difficult to predict longer-term economic effects because of the ongoing evolution of AI technology itself and changes in Japan’s economic structure.
>> Original text in Japanese
* Translated by RIETI.
April 3, 2026 - Published in Nihon Keizai Shimbun's "Economist 360° Perspective"
