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Taligens InsightThe Future of Work7 min read

What Electricity Teaches Us
About AI's Slow Payoff


Electric power took forty years to pay off, because factories first had to be rebuilt around it. Your AI investment faces the same test. Its return will depend on redesigning how your people commit to customers and to one another, and on building the judgment to deliver on those commitments.

Engraving of workers among the dynamos at Edison's Pearl Street power station
Edison's Pearl Street power station, New York, 1880s.

Thomas Edison demonstrated his electric light bulb in 1879. Twenty years later, only 3 percent of US households had electricity, and factories had barely more. It took another two decades to reach half the population. The economists Ajay Agrawal, Joshua Gans and Avi Goldfarb call this stretch "The Between Times": the years after a technology has shown what it can do, and before organizations have changed enough to benefit from it.

Many of the leaders we work with are going through a similar process and find themselves at the same stage, the Between Times, regarding their use and adoption of AI. They have funded the tools and the pilots, and they are under pressure to show a return. Some are quietly worried that the gains are not arriving as promised. The history of electricity suggests why, and where to look.

What held the factories back

The problem was not the technology. By the late 19th century, a typical factory was driven by a single steam engine. Its power traveled along a central shaft, and belts and pulleys carried it to each machine. Everything had to sit close to the shaft, which made factories cramped, multistory buildings that were unsafe and hard to work in.

When electric motors arrived, many factory owners simply put a motor where the steam engine had been. Everything else stayed as it was, and so, largely, did the results. The shaft was hard to see past because it worked: the buildings, routines and skills of everyone inside had grown up around it. On its own, a motor was just a better engine. What it was worth depended on everything around it.

The payoff came when managers stopped asking how to swap in the new power and started asking how a factory would look if it were designed around it. Freed from the shaft, machines could go where the work needed them, and production could be laid out around its flow. Henry Ford's moving assembly line, Agrawal, Gans and Goldfarb note, could not have been built on steam power. The line did more than make cars faster to build: it turned the car from a luxury into something millions of families could buy. Only then, decades after the light bulb, did electricity show up in the productivity figures. In the 1920s, productivity growth in American manufacturing surged, and the economist Paul David estimated that about half of the surge came from factories' new electric motors.

Leadership teams face the same choice with AI today: swap it into the work as it is, or redesign the work around it.

Crowded machine shop beneath overhead line shafts and belts, early 1900s
The line-shaft era: machines placed to suit the shaft. Machine shop, Ipswich Railway Workshops, Australia, early 1900s.
Assembly line at Ford's Highland Park plant, 1913
Built for electric drive: work laid out around its flow. Ford's Highland Park plant, 1913.

AI's Between Times

The pattern is repeating. In its 2019 Annual Business Survey, the US Census Bureau asked more than 300,000 companies about their use of AI and other advanced technologies between 2016 and 2018. Only about 3 percent were using AI at all, mostly to improve the processes they already had rather than to offer anything new.

Since then, adoption has been rapid. The Census Bureau's own fortnightly survey found that about one US business in five was using AI in early 2026. Among the fastest movers, the share is far higher. Ramp, a corporate card company, tracks the spending of more than 85,000 US businesses, a sample that leans toward technology firms. By September 2026, 55.9 percent of them were paying for an AI product or service, more than double the share in mid-2023.

Line chart: the share of US businesses on Ramp paying for an AI product or service rises from 25 percent in July 2023 to 55.9 percent in September 2026

Electricity took about forty years to go from Edison's demonstration to use by half the population. AI is moving along the same curve far faster. Across the economy, it stands roughly where electricity stood in the 1910s. Among the fastest movers, it is closer to 1920: on the eve of the payoff, for the firms that rebuild around it.

Spending is strikingly uneven. Among the firms paying for AI, the median spent about $16 a month per employee. In the top 1 percent, the typical firm spent more than $9,500 a month per employee, about 600 times as much.

Bar chart: monthly AI spend per employee among US businesses on Ramp — $15.70 at the median firm, $813 at the top 10 percent of firms, $9,568 at the top 1 percent

Spending is not the same as payoff. But the shape is familiar from electricity: a few firms are going deep while most are still dabbling, and the work of rebuilding around the technology is only beginning. For anyone setting an AI budget, the question is less how much to spend than what the spending is rebuilding.

What work is arranged around today

In a steam-era factory, everything was arranged around the shaft, and no one thought to question it until much later. In the new AI era, organizations are deploying the new tools to automate their existing processes, and thereby automating the same frustration and distrust that were there to begin with.

In our consulting work, we have learned that work is arranged around something less visible: the commitments people make to one another about who will deliver what, to whom, by when and to what standard. That is what a new tool disturbs, often without anyone paying attention to it.

Electricity removed a limit on where machines could stand. AI is removing a limit on how fast work can be produced. When producing the work stops being the slow part, the slow part becomes everything the work rests on: agreeing what the customer needs, judging whether the work meets it, and keeping the commitments people make to one another. Here the parallel with electricity ends. The shaft could be taken out. The network of commitments cannot, because it is how the work gets done. AI puts more weight on it, not less.


AI can produce the work. It cannot make a promise.


We saw this with a team at a large US energy company that we helped start using AI in its software development work. After a few weeks of groundwork, the tools were helping them build what the business had asked for. They also surfaced problems in older code that the team had long since learned to live with. That was the easy part. What came next was harder: a conversation no one wanted to have, about who would raise them and how their manager would hear them. That conversation, not the tool, decided whether anything would change. In our experience, this is where AI's findings most often stall in large organizations: on the way up, not in the technology. Here they didn't. We coached the team on how to raise them, and they went to management that week.

Much of the public debate about AI turns on keeping a "human in the loop." In our experience, that means more than someone checking the output. Whether work is good enough is always someone's call, made against what a particular customer needs and the standards a team shares. Those needs are worked out in conversation; they are not found in the output. Making that call takes judgment that comes from practice: knowing when the AI's work can be used, when it misleads, and when something needs repair. It also takes someone who cares how the work lands, and who keeps the promises made around it. Where no one is doing that, the gains stay small and the exposure, to customers and to the business, grows.

This is also why the payoff is slow. That judgment is a skill, and people build it the way they build any skill: by doing the work, falling short, and learning from those further along. When AI does the work junior staff used to learn on, that path narrows. Where will your next experienced managers come from? That is a workforce and training question as much as a technology one, and the organizations that gain most are likely to be the ones that answer it deliberately.

We are grateful to the philosopher B. Scot Rousse for the clearest statement of this argument we have seen. Rousse studies expertise, skilled work and what AI means for both. In a new chapter in The Oxford Handbook of the Philosophy of Work, he argues that AI succeeds only where people stay in the loop "not only as verifiers of output," but as the ones who care about the results and keep the commitments the business depends on. "Machines emit words," he writes, "but they cannot make promises, sustain trust, or take responsibility." Promises, trust and responsibility stay with your people, and they are what any AI investment rests on.

Where to start

You don't need a grand redesign to begin. Before the next round of AI spending, pick one workflow where a team is already using AI, and ask:

  • Which customer outcome does this work serve, and who has agreed what good enough looks like?
  • Who can judge whether the AI's output meets that standard, and how are newer staff building that capability?
  • When the AI's output falls short, how quickly does that come to light, and does it reach someone with the authority to act?
  • When the work is delivered, who is accountable for it, and does the customer receiving it accept it?
  • What can you now offer customers that you couldn't before, and is that where your AI budget is going?

If the first four answers come slowly, you have found where the redesign starts, and likely where your AI spending is not yet paying off. The last tells you what it could be worth. The factories that prospered from electricity did not get there by buying better motors. They rebuilt the work around them.

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Sources

  • Ajay Agrawal, Joshua Gans and Avi Goldfarb, Power and Prediction: The Disruptive Economics of Artificial Intelligence (Boston: Harvard Business Review Press, 2022), chapters 1 and 2.
  • Paul A. David, "Computer and Dynamo: The Modern Productivity Paradox in a Not-Too-Distant Mirror," Working Paper No. 339, Department of Economics, Stanford University, 1989. Cited by Agrawal, Gans and Goldfarb for the electrification figures.
  • Paul A. David, "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review 80, no. 2 (1990): 355–361. The source for the 1920s productivity finding.
  • Daron Acemoglu et al., "Automation and the Workforce: A Firm-Level View from the 2019 Annual Business Survey," conference paper, National Bureau of Economic Research, February 2022. Cited by Agrawal, Gans and Goldfarb for the Census Bureau findings; the 2016–2018 dates and the 3.2 percent AI adoption figure are from the paper itself.
  • US Census Bureau, Business Trends and Outlook Survey, November 2025 to May 2026, as reported in Federal Reserve Bank of Minneapolis, "AI Adoption in Business Grows Steadily but Unevenly," May 29, 2026. Since November 2025 the survey asks about AI use in any business function, a broader question than before. Not directly comparable with the 2019 survey.
  • Ramp, "Ramp AI Index," ramp.com/data/ai-index, data through September 2026 (published October 14, 2026). Share of US businesses on Ramp paying for AI, and monthly AI spend per employee by spending tier; for the top 10 and top 1 percent, the figure is the median firm within that group. Ramp's sample skews toward technology firms and is not the whole economy.
  • B. Scot Rousse, "Heidegger and Phenomenological Approaches to Work," in Julian David Jonker and Grant J. Rozeboom, eds., The Oxford Handbook of the Philosophy of Work (Oxford: Oxford University Press, published online September 22, 2026), doi:10.1093/oxfordhb/9780197693643.013.0036. Outlined by the author in "My Paper in 'The Oxford Handbook of the Philosophy of Work'," Without Why (Substack), October 9, 2026, withoutwhy.substack.com.
  • Engraving: the dynamo room at Edison's Pearl Street station, New York, 1880s. Deutsches Museum, via Wikimedia Commons (public domain).
  • Photograph: Albert Edwin Roberts, machine shop, Ipswich Railway Workshops, Queensland, Australia, early 1900s. Queensland Museum, via Wikimedia Commons (public domain).
  • Photograph: assembly line at the Ford Motor Company's Highland Park plant, 1913. Library of Congress, Prints and Photographs Division, LCCN 2011661021 (no known restrictions).