---
id: "concept-complementarity"
type: "concept"
source_timestamps: ["¶5"]
tags: ["economics", "value-creation", "ai-economics"]
related: ["concept-induced-demand", "claim-sign-off-is-product", "entity-prediction-machines", "entity-ajay-agrawal", "entity-joshua-gans", "entity-avi-goldfarb", "prereq-microeconomics"]
definition: "An economic dynamic where the decreasing cost of one input (e.g., AI generation) increases the value and scarcity of its related complementary inputs (e.g., human judgment)."
sources: ["futures"]
sourceVaultSlug: "hbr-seg-futures"
originDay: 2
articleStem: "hbr-cl-84-big-tech-capability-crisis"
sourceUrl: "https://hbr.org/2026/06/big-techs-looming-capability-crisis"
sourceTitle: "Big Tech’s Looming Capability Crisis"
---
# Complementarity of AI and Judgment

## Complementarity of AI and Judgment

Drawn from the book *[[entity-prediction-machines|Prediction Machines]]* by [[entity-ajay-agrawal|Ajay Agrawal]], [[entity-joshua-gans|Joshua Gans]], and [[entity-avi-goldfarb|Avi Goldfarb]]: when the cost of a specific input (like prediction, or code generation) falls, the value of its **complementary inputs rises**.

Applied to AI: cheaper generation raises the premium on human **judgment, accountability, and sign-off**. The raw output — a scan, or a block of code — is **not the final product**. The product is the accountable [[claim-sign-off-is-product|sign-off]] by a licensed, reputable professional.

This is the mechanism that makes [[concept-induced-demand|induced demand]] bite: cheaper code doesn't just expand the market, it shifts value toward the scarce complement. See [[prereq-microeconomics]] for the background this argument assumes.

> Enrichment: Well supported by the article's economic framing and the cited AI-economics literature. HBR explicitly says cheaper prediction raises the value of complementary human judgment and accountability, citing the *Prediction Machines* line of work.


## Related across articles
- [[concept-service-as-software]]
- [[claim-professional-services-disruption]]