AI Can Increase Productivity. But Human Capital Will Determine a Company's Value.

The world of work is undergoing profound transformations that bring both risks and opportunities. To analyze them properly, it is essential to avoid both overly optimistic oversimplifications and catastrophic predictions. The former are fueled by recipes that promise miraculous solutions for job quality, motivation, well-being, inclusion, and sometimes even happiness. The latter are driven by scenarios of disappearing jobs, vanishing professions, young people leaving, widening inequalities, and AI taking over from humans.

Avoiding these two opposite extremes, this discussion focuses on three critical issues that have long been at the center of debate among HR professionals, entrepreneurs, trade union representatives, and scholars: first, the current state and possible evolution of the employment relationship; second, the integration of new technologies; and finally, the organization of work across time and space. Hopefully, these ongoing discussions will soon produce meaningful ideas, because time is running short.

Among these topics, the employment relationship is the most urgent. The traditional capital-versus-labor polarization that has shaped contractual—and often conflictual—relations over recent decades is no longer adequate to address the challenges arising from the knowledge economy. At present, the employment relationship has few viable alternatives. Some have clearly failed. Others have succeeded, but at the cost of values that a significant portion of society is unwilling to sacrifice. Still others have attempted to combine capital and labor in new ways: employee participation in management, ownership and profit-sharing—recently supported in Italy through Law No. 76/2025—corporate social responsibility policies, benefit corporations, sustainability reporting, and the monitoring of non-financial performance.

The employment relationship develops across three dimensions.

The first is political and concerns the power imbalance that legitimizes hierarchy within organizations. Hierarchy becomes more effective when it is not based exclusively on that imbalance.

The second is economic and concerns the exchange of wages for work. Companies relate wages to labor productivity, while employees relate them to their own needs, often creating misalignment between the two perspectives.

The third concerns the sharing of knowledge, information, and values.

From Hierarchy to Human Capital

Hierarchy essentially performs functions of direction and control. In the knowledge economy, however, these functions require new forms of legitimacy beyond contractual authority. Hierarchical power must evolve and become less rigid, while employees are expected to contribute greater value and generate meaningful impact.

This requires workers to take greater initiative in developing their own skills, managing their professional growth with an entrepreneurial mindset that involves investing in their own human capital while accepting the associated risks. This is the only way to avoid being confined to a passive and bureaucratic role by organizational structures that are not always willing to renew themselves.

Employees should manage their portfolio of skills with the mindset of a startup founder, while companies could adopt an open innovation approach toward their people.

The social elevator, however, has stalled on the ground floor—if not in the basement. This is not only because today's corporate structures resemble less and less the orderly skyscrapers designed by Renzo Piano, where every floor is clearly connected and upward mobility is possible, and increasingly resemble the impossible constructions of M.C. Escher, whose staircases intersect without ever truly leading upward. It has also stalled because of the passivity of a silent army waiting for a miracle to set it in motion again.

Yet for those who choose to react, opportunities to access information, accumulate knowledge, develop new skills, and continuously renew their competencies have never been so numerous, accessible, and diverse. What is needed is a decisive shift: stronger cooperation between generations and a determined response from younger people, whose mobility—far broader than what is simplistically described as "brain drain"—is already a positive sign.

Wages, Productivity, and Perceived Fairness

For several decades Italy has been experiencing wage stagnation that places it among the lowest-ranking OECD countries. Many economists, together with the Bank of Italy, identify low productivity as one of the main causes of companies' limited ability to pay higher wages. Other explanations point to the limited effectiveness of mechanisms designed to protect workers' purchasing power.

Productivity depends on two fundamental factors: labor productivity and labor intensity.

Labor productivity is driven by business investment in technology, innovation, organizational development, and human capital. Public investment and workers' own investments in their skills also contribute.

Labor intensity, on the other hand, depends on work pace, schedules, and employment conditions—in other words, on the amount of labor consumed.

If wage growth depends exclusively on increasing labor intensity, rather than on productivity, wages inevitably remain depressed, reinforcing what has been described as the commoditization—or, if preferred, the banalization—of work lacking quality.

Those responsible for compensation face the challenge of reconciling two objectives that may conflict: internal equity and external competitiveness.

Internal equity is often assessed through supposedly objective methods that are, in reality, never entirely objective.

Evaluating a job and its contribution to the value chain—where measurable elements prevail—is fundamentally different from evaluating the person performing that job, where subjective factors play a much greater role.

Likewise, assessing monetary compensation is different from evaluating the entire reward package, which also includes welfare programs, employee benefits, career opportunities, organizational culture, and many other elements.

Perceived unfairness has an enormous impact on motivation.

Employees who feel unfairly treated may resign, but more often they simply reduce their level of commitment.

For this reason, organizations must recognize these misalignments early and address them before conflict arises, because once formal disputes begin, the employment relationship has already been compromised.

Interestingly, employees' perception of fairness is influenced much more by discovering that the colleague sitting at the next desk earns a few dozen euros more than by learning that the CEO earns millions.

It should also be recognized that excessively high executive compensation belongs more to the realm of profits and economic rents than to genuine remuneration.

At the same time, wage differentiation remains economically necessary.

Excessive wage equalization is not an effective solution. Differences in pay must be large enough to encourage people to develop new competencies, assume greater responsibilities, and pursue professional growth—but not so large that they undermine the perception of fairness and basic decency.

Beyond Compensation: The Importance of Shared Purpose

The third dimension of the employment relationship is sharing.

Beyond the economic exchange, employment relationships require consensus, a shared purpose, common objectives, and aligned values. Without shared meaning and values, the employment relationship gradually becomes impoverished, remaining confined to its purely economic and conflictual dimension.

Weak values—such as selfishness or opportunism—divide people and enrich only a few. Strong values—such as social responsibility and fairness—bring people together and create value for many.

Only under these conditions can companies enable human capital to grow, preserve itself, generate value, strengthen relationships, and build a genuine sense of belonging.

Without shared meaning, organizations cannot truly be led.

This raises a fundamental question of identity.

Many companies are increasingly investing efforts in discovering, rebuilding, and protecting their organizational identity.

After all, what is employer branding if not an organization's attempt to define and communicate its own identity?

Employees need that identity in order to recognize themselves within the organization and to be recognized by others.

An enriched employment relationship can therefore become a container of identity.

This may be the most delicate challenge of all, because authenticity cannot be replaced by clever communication or superficial initiatives.

The Future of Work Between Human Intelligence and Artificial Intelligence

A second—and even broader—challenge concerns technology, particularly robotics and Artificial Intelligence, whose importance can hardly be overstated.

It is essential to avoid demonizing these technologies, which would lead to a new form of digital neo-Luddism.

At the same time, we must not underestimate the risk of excessive concentrations of power and profits, which already characterize this sector regardless of potential market bubbles or temporary hype.

Unless properly regulated, these concentrations could slow down or even prevent the widespread distribution of technological benefits while creating new forms of dependency.

Technology should instead free people from the most repetitive and burdensome aspects of work, enhancing uniquely human capabilities and allowing individuals to focus on what truly distinguishes them from machines.

Today, however, machines are increasingly involved in an unrealistic race to imitate—or even replace—human intelligence, a competition that, if pursued to its extreme, risks ending with everyone losing.

There are many things that human beings still do better than machines, just as machines perform certain tasks better than humans.

Based on current scientific knowledge, Artificial Intelligence still does not appear capable of developing intentionality, emotional intelligence, social intelligence—the ability to work with and for others—or introspective intelligence, namely the understanding of oneself within a broader context.

The real question is whether humanity will be able to preserve these uniquely human qualities as increasingly sophisticated AI agents emerge—systems capable of understanding context, learning autonomously, pursuing their own objectives, and collaborating both with humans and with other AI systems.

Today, hundreds of billions are being invested in attempting to replicate human thinking and build machines capable of reasoning like people.

Yet humanity already has billions of people capable of thinking.

If those people are replaced, society will eventually have to determine how they will continue to earn a living.