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flag AI adoption initially cuts U.S. manufacturing productivity by up to 44%, but long-term gains follow, especially for newer firms.

flag At the 2026 American Economic Association conference, research revealed that U.S. manufacturing firms adopting AI initially face sharp productivity drops—up to 44%—due to high setup and retraining costs, but eventually see strong gains over time, forming a "J" curve. flag Newer, more agile firms benefited most, while older companies struggled with adaptation. flag Another study highlighted how WWII-era government investment in penicillin production through public-private partnerships created a lasting model for scientific innovation, driving advancements in medicine, defense, and technology for decades.

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