Look for New Ways to Create Value When Deploying Gen AI
Analysis of 800 public companies shows AI productivity gains are being competed away — sectors with highest automation potential show no margin expansion, forcing firms to seek value through innovation and business model redesign rather than efficiency alone.
Summary
BCG Henderson Institute researchers analyzed 800 public companies and found no link between a sector's automation potential and margin expansion. Gen AI is delivering real productivity gains, but competition rapidly erodes them. The authors argue firms must shift from cost-out deployments toward using AI for new value creation — including business model innovation, new product development, and ecosystem repositioning. This directly challenges the dominant narrative that AI adoption equals profit improvement.
Key concepts
Productivity paradox · AI value capture · competitive erosion of efficiency gains · business model innovation · profit pool dynamics