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AI adoption and Solow's productivity paradox

fortune.com

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Re: AI adoption and Solow's productivity paradox

#421

Post by kombookcha »

birdsongs wrote: post #398
kombookcha wrote: post #371

Earlier quoted context omitted.

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 mo…

Personally I strongly doubt it. Since the nature of LLM's does not allow them semantic content or context, I believe it is inherently a tool unsuited for this task. As far as I can tell, it's a limitation of the technology itself, not of the amount of power behind it.

Either way, being able to generate or compress loads of text very quickly with no understanding of the contents simply is not the bottleneck of information transfer between human beings.

Re: AI adoption and Solow's productivity paradox

#422

Post by notahacker »

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…

Yep. The other way it can have net no impact is if it saves thousand of hours of report drafting and reading but misses the one salient fact buried in the observations that could actually save the company money. Whilst completely nailing the fluff.

Re: AI adoption and Solow's productivity paradox

#423

Post by bryanlarsen »

tonyedgecombe wrote: post #248
bryanlarsen wrote: post #92

Earlier quoted context omitted.

Productivity is the ratio of outputs to inputs, both measured in dollars.

Productivity is the ratio of real GDP to total hours worked.

That's labor productivity, a different measure. But the original article references labor productivity, so your definition is more relevant.

Re: AI adoption and Solow's productivity paradox

#425

Post by amoss »

SpaceNoodled wrote: post #373
anon-3988 wrote: post #360

Earlier quoted context omitted.

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

So what we now have is a very expensive and energy-intensive method for inflating data in a lossy manner. Incredible.

Remarkably it has only cost a few trillion dollars to get here!

Re: AI adoption and Solow's productivity paradox

#426

Post by flurdy »

It's the same reason why I have, for more than a decade, been so frustrated with people refusing to consider proper pair programming and even mob programming, as they view the need to keep people busy churning lines of code individually as the most important part of the company.

That multiple AI agents can now churn out those lines relatively nearly instantly, and yet project velocity does not go much faster, should start to make people aware that code generation is not actually the crucial cost in time taken to deliver software and projects.

I ranted recently that small mob teams with AI agents may be my view of ideal team setup: https://blog.flurdy.com/2026/02/mob-together-when-ai-joins-t...

Re: AI adoption and Solow's productivity paradox

#427

Post by jen729w »

abraxas wrote: post #64
torben-friis wrote: post #42

Earlier quoted context omitted.

The comparison seems flawed in terms of cost. A Claude subscription is 20 bucks per worker if using personal accounts billed to the company, which is not very far from common office tools like slack. Onboarding a worker to Claude or ChatGPT is ridiculously easy compared to teaching a 1970’s manual office worker to use an early computer. Larger implementations like automating customer service might be more costly, but…

What if LLMs are optimizing the average office worker's productivity but the work itself simply has no discernable economic value? This is argued at length in Grebber's Bullshit Jobs essay and book.

Have had job. Can confirm.

Re: AI adoption and Solow's productivity paradox

#428

Post by vidarh »

torben-friis wrote: post #42
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…

The comparison seems flawed in terms of cost. A Claude subscription is 20 bucks per worker if using personal accounts billed to the company, which is not very far from common office tools like slack. Onboarding a worker to Claude or ChatGPT is ridiculously easy compared to teaching a 1970’s manual office worker to use an early computer. Larger implementations like automating customer service might be more costly, but…

A $20 Claude subscription lets you scratch the surface. A $20 Claude subscription without training means you have a lot of people spending time figuring out how to use it, and then maybe getting a bit of payback, but earning back that training is going to take time.

Getting people to figure out how to enter questions is easy. Getting people to a point where they don't burn up all the savings by getting into unproductive conversations with the agent when it gets something wrong, is not so easy.

Re: AI adoption and Solow's productivity paradox

#429

Post by pydry »

majormajor wrote: post #250
hattmall wrote: post #93

Earlier quoted context omitted.

I find that highly unlikely, coding is the AIs best value use case by far. Right now office workers see marginal benefits but it's not like it's an order of magnitude difference. AI drafts an email, you have to check and edit it, then send it. In many cases it's a toss up if that actually saved time, and then if it did, it's not like the pace of work is break neck anyway, so the benefit is some office workers have a…

Coding is a relatively verifiable and strict task: it has to pass the compiler, it has to pass the test suite, it has to meet the user's requests. There are a lot of white-collar tasks that have far lower quality and correctness bars. "Researching" by plugging things into google. Writing reports summarizing how a trend that an exec saw a report on can be applied to the company. Generating new values to share at a com…

>Coding is a relatively verifiable and strict task: it has to pass the compiler, it has to pass the test suite, it has to meet the user's requests.

Except the test suite isnt just something that appears and the bugs dont necessarily get covered by the test suite.

The bugginess of a lot of the software i use has spiked in a very noticeable way, probably due to this.

>But everyone in all those fields is going to be trying really really hard to enumerate all the reasons it's special and AI won't work well for them.

No, not everyone. Half of them are trying to lean in to the changing social reality.

The gaslighting from the executive side, on the other hand, is nearly constant.

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