AI Economics

Solow paradox

The Solow paradox is the coexistence of widespread computing and weak measured productivity growth.

Explanation

Technology alone is not the same as a productive system. Firms may need to redesign workflows, train people, build complementary tools, and spread new practices before the gains appear; some benefits may also be poorly measured.

AI may repeat this pattern: striking capabilities can arrive before organizations learn to use them at scale. The paradox is therefore a warning about lags and measurement, not proof that the technology has no economic value.

Sources