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AI adoption and Solow's productivity paradox

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Re: AI adoption and Solow's productivity paradox

#391

Post by storus »

aurareturn wrote: post #232
tabs_or_spaces wrote: post #218

My experience has been * If I don't know how to do something, llms can get me started really fast. Basically it distills the time taken to research something to a small amount. * if I know something well, I find myself trying to guide the llm to make the best decisions. I haven't reached the state of completely letting go and trusting the llm yet, because the llm doesn't make good long term decisions * when working a…

The future of work is fewer human team members and way more AI assistants. I think companies will need fewer engineers but there will be more companies. Now: 100 companies who employ 1,000 engineers each What we are transitioning to: 1000 companies who employ 10 engineers each What will happen in the future: 10,000 companies who employ 1 engineer each Same number of engineers. We are about to enter an era of explosiv…

It will lead to hollowing out of the substance everywhere. The constant march to more abstraction and simplicity will inevitably end up with AI doing all the work and nobody understanding what is going on underneath, turning technology into magic again. We have seen people losing touch with how things work with every single move towards abstraction, machine code -> C -> Java -> JavaScript -> async/await -> ... -> LLM code generation, producing generations of devs that are more and more detached from the metal and living in a vastly simplified landscape not understanding trade-offs of the abstractions they are using, which leads to some unsolvable problems in production that inevitably arise due to the choices made for them by the abstractions.

Re: AI adoption and Solow's productivity paradox

#392

Post by onorton »

jeron wrote: post #5
DaedalusII wrote: post #3

If you include microsoft copilot trials in fortune 500s, absolutely. A lot of major listed companies are still oblivious to the functionality of AI, their senior management don't even use it out of laziness

it turns out it's really hard to get a man to fish with a pole when you don't teach them how to use the reel

I'm not sure if this was the intention of the analogy, but fishing poles don't have reels.

Re: AI adoption and Solow's productivity paradox

#393

Post by Underqualified »

__jf__ wrote: post #256
crazygringo wrote: post #21

Just to be clear, the article is NOT criticizing this. To the contrary, it's presenting it as expected , thanks to Solow's productivity paradox [1]. Which is that information technology similarly (and seemingly shockingly) didn't produce any net economic gains in the 1970's or 1980's despite all the computerization. It wasn't until the mid-to-late 1990's that information technology finally started to show clear benef…

Paul Strassmann wrote a book in 1990 called "Business Value of Computers" that showed that it matters where money on computers is spent. Only firms that spent it on their core business processes showed increased revenues whereas the ones that spent it on peripheral business processes didn't.

This is my feeling about both IT and AI. It enables companies to do a lot of things which don't really bring value. One of the biggest use case for AI in the company I work for now is powerBI report generation. Fine, but a couple of years ago we didn't even have all these graphs and reports. I'm not sure they bring actual value, since I see decisions still being made mostly on intuition.

Re: AI adoption and Solow's productivity paradox

#394

Post by WJW »

wiseowise wrote: post #227
Aurornis wrote: post #132

Earlier quoted context omitted.

> but the work itself simply has no discernable economic value? This is argued at length in Grebber's Bullshit Jobs essay and book. That book was very different than what I expected from all of the internet comment takes about it. The premise was really thin and did't actually support the idea that the jobs don't generate value. It was comparing to a hypothetical world where everything is perfectly organized, everyon…

> They exist because the company gets more benefit out of the job existing than it costs to employ those people. Not necessarily, I’ve seen a lot of jobs that were just flying under the radar. Sort of like a cockroach that skitters when light is on but roams freely in the dark.

It's just a self-built UBI.

Re: AI adoption and Solow's productivity paradox

#395

Post by TimByte »

Herring wrote: post #9

My compsci brain suggests large orgs are a distributed system running on faulty hardware (humans) with high network latency (communication). The individual people (CPUs) are plenty fast, we just waste time in meetings, or waiting for approval, or a lot of tasks can't be parallelized, etc. Before upgrading, you need to know if you're I/O Bound vs CPU Bound.

In some cases it might even make the mismatch worse. If one person can produce drafts, specs, or code much faster, you just create more work for reviewers, approvers, and downstream dependencies, which increases queueing

Re: AI adoption and Solow's productivity paradox

#396

Post by zelphirkalt »

notepad0x90 wrote: post #262
Herring wrote: post #9

My compsci brain suggests large orgs are a distributed system running on faulty hardware (humans) with high network latency (communication). The individual people (CPUs) are plenty fast, we just waste time in meetings, or waiting for approval, or a lot of tasks can't be parallelized, etc. Before upgrading, you need to know if you're I/O Bound vs CPU Bound.

In my opinion, you're very wrong. There is typically lots of good communication -- one way. The stuff that doesn't get communicated down to worker bees is intentional. "CPUs" aren't all that fast either, unless you make them by providing incentives. if you're a well paid worker who likes their job, i can see why you would think that, but most people aren't that. Meetings are work, as much as IPC and network calls are…

Meetings can be work, but often they are a waste of time. Often they are only done, because the company has not found a better way to structure itself, which is also accepted by the management lawyer, who often has a profound fear of loss of control and likes to micromanage. If you can zone out for most of the meeting, and not experience negative effects from that, then the meeting was a waste of your time.

Re: AI adoption and Solow's productivity paradox

#397

Post by XenophileJKO »

overgard wrote: post #170
whynotminot wrote: post #143

Earlier quoted context omitted.

It’s also pretty wild to me how people still don’t really even know how to use it. On hacker news, a very tech literate place, I see people thinking modern AI models can’t generate working code. The other day in real life I was talking to a friend of mine about ChatGPT. They didn’t know you needed to turn on “thinking” to get higher quality results. This is a technical person who has worked at Amazon. You can’t expec…

I don't think "results don't match promises" is the same as "not knowing how to use it". I've been using Claude and OpenAI's latest models for the past two weeks now (probably moving at about 1000 lines of code a day, which is what I can comfortably review), and it makes subtle hard-to-find mistakes all over the place. Or it just misunderstands well known design patterns, or does something bone headed. I'm fine with…

If you know good architecture and you are testing as you go, I would say, it is probably pretty damn close to being able to build a company without looking at the code. Not without "risk" but definitely doable and plausible.

My current project that I started this weekend is a rust client server game with the client compiled into web assembly.

I do these projects without reading the code at all as a way to gauge what I can possibly do with AI without reading code, purely operating as a PM with technical intuition and architectural opinions.

So far Opus 4.6 has been capable of building it all out. I have to catch issues and I have asked it for refactoring analysis to see if it could optimize the file structure/components, but I haven't read the code at all.

At work I certainly read all the code. But would recommend people try to build something non trivial without looking at the code. It does take skill though, so maybe start small and build up the intuition on how they have issues, etc. I think you'll be surprised how much your technical intuition can scale even when you are not looking at the code.

Re: AI adoption and Solow's productivity paradox

#398

Post by birdsongs »

kombookcha wrote: post #371
anon-3988 wrote: post #360

Earlier quoted context omitted.

You are forgetting that they are now going to use AI to summarize it back.

This is one of my major concerns about people trying to use these tools for 'efficiency'. The only plausible value in somebody writing a huge report and somebody else reading it is information transfer. LLM's are notoriously bad at this. The noise to signal ratio is unacceptably high, and you will be worse off reading the summary than if you skimmed the first and last pages. In fact, you will be worse off than if you…

> LLM's are notoriously bad at this. The noise to signal ratio is unacceptably high

I could go either way on the future of this, but if you take the argument that we're still early days, this may not hold. They're notoriously bad at this so far.

We could still be in the PC DOS 3.X era in this timeline. Wait until we hit the Windows 3.1, or 95 equivalent. Personally, I have seen shocking improvements in the past 3 months with the latest models.

Re: AI adoption and Solow's productivity paradox

#399

Post by wongarsu »

mrtksn wrote: post #230
alephnerd wrote: post #211

Earlier quoted context omitted.

Who's your persona? How are you pricing and packaging? Who is your buyer? Are you D2C? Consumer? Replacing EAs? Replacing Project Managers? ... You need to answer these questions in order to decide whether a Show HN makes sense versus a much more targeted launch. If you do not know how to answer these questions you need to find a cofounder asap. Technology is commodified. GTM, sales, and packaging is what turns techn…

The persona is, someone who knows what are they doing but need someone to actually automate their work routine. I.e. maybe it’s a crypto trader that makes decisions on signals interpretation so they can create a trading bot that executes on their method. Maybe its a compliance who needs automate some routine like checking details further when some conditions arise. Or maybe a social media manager that needs to modera…

That persona still sounds too generic, too unfocused.

But even with that persona, it should already answer your question whether posting on HN and producthunt should be a core part of your strategy. Not a lot of social media managers or compliance people around here. And even for crypto traders there are better places to pitch products to them

Re: AI adoption and Solow's productivity paradox

#400

Post by concats »

If we assume people are somewhat rational (big ask I know), and the Efficient-market hypothesis, then we can estimate the value created by AI to be roughly equal to the revenue of these AI companies. That is: A professional who pays 20€/month likely believes that the AI product provides them with roughly 20€ each month in productivity gains, or else they wouldn't be paying, and similarly they would pay more for a bigger subscription if they thought there was more low hanging fruit available to grab.

Of course this doesn't take into account people who just pay to play around and learn, non professional use cases, or a few other things, but it's a rough ballpark estimate.

Assuming the above, current AI models would only increase the productivity for most workplaces by a relatively small amount, around 10-200 € per employee per month perhaps. Almost indistinguishable compared to salaries and other business expenses.

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