Machines are more productive than humans until they aren't, and vice versa

With the growth of artificial skills, organizations are increasingly confronting the problem of optimizing skill policy decisions guided by economic principles. This paper addresses the underlying complexity of this challenge by developing an in-silico framework based on Monte Carlo simulations grounded in empirical realism to analyze the economic impact of human and machine skills, individually or jointly deployed, in the execution of tasks presenting varying levels of complexity. Our results provide quantitative support for the established notions that automation tends to be the most economically-effective strategy for tasks characterized by low-to-medium generalization difficulty, while automation may struggle to match the economic utility of human skills in more complex scenarios. Critically, our simulations highlight that, when a high level of generalization is required and the cost of errors is high, combining human and machine skills can be the most effective strategy, but only if genuine augmentation is achieved. In contrast, when failing to realize this synergy, the human-machine policy is severely penalized by the inherent costs of its dual skill structure, causing it to destroy value and become the worst choice from an economic perspective. The takeaway for decision-makers is unambiguous: in complex and critical contexts, simply allocating human and machine skills to a task may be insufficient, and a human-machine skill policy is neither a silver-bullet solution nor a low-risk compromise. Rather, it is a critical opportunity to boost competitiveness that demands a strong organizational commitment to enabling augmentation. Also, our findings show that improving the cost-effectiveness of machine skills over time, while useful, does not replace the fundamental need to focus on achieving augmentation.