AI's Impact on Input-Output Efficiency: A Two-Pronged Approach

The influence of AI on input-output efficiency can be observed through two factors: 'input inefficiency' and 'technological inefficiency'. Companies are motivated to adopt intelligent technologies due to the potential for cost reduction. AI not only alters the input composition of production factors and diminishes the need for low-skilled labor, but also decreases transaction costs in the business market, such as 'search costs', 'information costs', 'transportation costs', 'delivery costs', and 'management costs', by improving production management.