The Visionaries – New Risks, New Rewards

The productivity paradox: Does more technology mean less growth?

Nobel Prize-winning economist Robert Solow famously remarked, "You can see the computer age everywhere except in the productivity statistics." This paradox remains relevant today as industries rapidly adopt AI, automation, and digitalisation. Despite their potential to boost productivity by automating tasks and optimising processes, the initial costs of implementing these technologies—such as investments in new systems and employee training— can temporarily slow growth.

Moreover, their benefits often take time to materialise, as companies navigate integration challenges. Additionally, as technology advances, incremental productivity gains may diminish.