3 days ago
How AI agents could reshape the economy
Imagine a world where your digital assistant not only schedules meetings and books trips but also negotiates with dozens of businesses on your behalf, finding the best prices, customising services, and handling payments in seconds. This isn't science fiction. It's the emerging reality of what experts call the agentic economy, powered by generative AI. AI(REUTERS)
Already, research from leading economists shows that these technologies are transforming productivity. A recent large-scale field experiment published in the Journal of Econometrics by Erik Brynjolfsson, Danielle Li, and Lindsey Raymond found that generative AI significantly boosts the output of knowledge workers, especially helping less-experienced employees reach the performance levels of their more seasoned peers. This real-world evidence offers a glimpse into how AI might not only make individuals more efficient but also help narrow skill gaps in the workforce.
The concept of the agentic economy goes beyond individual productivity. As explored in a study by researchers at Microsoft Research, AI is poised to reduce the friction of communication between consumers and businesses. Instead of painstakingly filling out forms or explaining your situation repeatedly to different service providers, your assistant agent could securely transmit your preferences and history to business-side service agents, instantly tailoring offers to your needs.
This could unlock entirely new options that were previously buried under cumbersome processes. For instance, switching accountants or trying a new insurer might become as easy as a short prompt to your AI assistant, who negotiates terms with multiple providers in real time.
Such advances could dramatically alter who holds power in the digital economy. Today, giants like Amazon, Google, and Meta act as middlemen—platforms that set rules, curate experiences, and take commissions by bringing together millions of buyers and sellers.
But if AI agents on both sides can communicate directly, the need for these costly intermediaries may shrink. Consumers' assistant agents could interact directly with businesses' service agents, comparing prices, customizing bundles, and even resolving disputes. This would foster a more decentralized, competitive market landscape.
Still, experts caution that platforms often provide more than just matchmaking. They add value through validation, fraud prevention, and standardised experiences. As a result, we may see platforms evolve rather than disappear, competing fiercely in a market with much lower switching costs.
Perhaps the most critical question is whether this agent-driven economy will flourish inside closed ecosystems, agentic walled gardens, or thrive in an open web of agents.
Large tech companies are already taking steps to build their own controlled agent marketplaces. Meta, for example, recently launched business service agents on Facebook and Instagram that only work within their platforms. This model can ensure quality and security, but risks consolidating power in the hands of a few players, potentially stifling innovation and fragmenting the user experience.
Conversely, an open agent ecosystem would resemble today's world wide web, where any consumer's agent could connect with any business's agent. This would democratise access and spur competition—but would require global cooperation on technical standards, along with robust systems for trust and security.
AI agents could also revolutionise advertising. Right now, businesses pay to capture our attention. In an agentic economy, attention may be less scarce; instead, algorithms matching consumer assistants with service agents become the critical battleground.
Paid prioritisation will likely remain in some form, but the true driver of success could be human feedback. As Brynjolfsson and his colleagues found, AI tools are most effective when they learn from high-quality user interactions. In the future, businesses may compete to attract early users whose feedback helps train smarter systems, shifting us from an attention economy to a preference economy.
Imagine paying small amounts to access only what you need—whether it's a custom-tailored news article that skips what you've already read or a playlist dynamically mixed across streaming platforms. As assistant agents seamlessly handle transactions, micro-payments that once seemed impractical could become commonplace.
This also sets the stage for extreme unbundling and rebundling of products. Assistant agents might pull from multiple content or service sources to build hyper-personalised offerings, negotiating micro-transactions behind the scenes.
We stand at a pivotal moment, much like the dawn of the internet in the 1990s. Whether this next wave of AI delivers widespread opportunity or concentrates power even further depends on decisions made now by tech leaders, regulators, and consumers alike.
The evidence is already here: From field experiments proving how AI boosts worker productivity to new frameworks enabling agents to communicate on our behalf. As we step into this agentic future, we must carefully choose the architecture of our digital economy because it will determine who benefits from this revolutionary technology.
Generative AI is not just about personal productivity; it's about reshaping how markets work. Whether we end up in walled gardens controlled by tech giants or a vibrant, open web of competing agents will decide if this new economy truly serves us all.
This article is authored by Narinder Kumar, assistant professor, RV University), Amit Kumar, research scientist, PGIMER, Chandigarh and Kiran Sood, professor, Chitkara University, Punjab.
