Can AI overcome the Solow Paradox?

View profile for Deep Mukherjee

"Empiricist" solving business problems by drawing insights from behavioural data, balance sheet and macroeconomic data

Dear All, Kindly find my latest piece in kindly carried in today's MINT. In 1987, having monitored the computer usage boom for over a decade, Nobel Laureate Robert Solow commented, “You can see the computer age everywhere but in the productivity statistics.” to day, the adoption of #artificialintelligence (#AI) may be suffering from its own version of the #SolowParadox. Boston Consulting Group (BCG) 's AI Radar (January 2025)- From Potential to Profit, which surveyed 1,800 plus C-suite global executives, found that only 25% see value gains from AI. The piece discusses four interconnected factors which are critical for capturing value from their AI initiative. Thoughts to ponder: The electric bulb did not come from a continuous improvement of candles, to quote Oren Harari. If 19th century candle makers had access to electricity, most would have used it to melt wax faster to make more candles. It is unlikely that they would have invented the light bulb. However,#GenAI offers organizations the power to learn from everywhere tap civilizational knowledge and reduce their institutional knowledge gaps. Can today’s organizations be candle makers that also invent the light bulb of the future?

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Superb - especially on AI transformation for existing sub-optimal processes - in the words of a Senior Banker I know 'If you digitize s*it you just get digital s*it'

Sage advice as always Deep Mukherjee 🫡👍

Surya Teja G

AI Product Leader | Driving Scalable Growth for Tech Platforms | MBA - IIM Calcutta

1mo

Interesting read, The real leap is augmentation: redesigning processes so humans + AI together can do things that weren’t possible before.

Rudra Sensarma

Professor of Economics at Indian Institute of Management Kozhikode. Past experience: University of Hertfordshire, IIM Lucknow, RBI; post-doc at University of Birmingham and PhD from IGIDR, Mumbai.

1mo

Very interesting analysis - thanks for sharing.

Prateep Basu

CEO & Co-founder @ SatSure | Aerospace Engineering

1mo

As usual Deep da, great insights! And very relatable to our work experiences with enterprises, were the focus on decision quality is usually lacking because the *quantification of it for the P&L is difficult to make* - leading to either 'not so big' bets on AI or falling back on automating the sub optimal processes.

Aditya Sengar

Independent Director | Ind. Expert Bkg, Digital Payments, FRM | Advisor Yugen | Sr Consultant NDMC | Guest Faculty | Chief General Manager - Risk, SBI | CGM & Business Head PBBU, SBI | Head MRAU, SFIO | CFO, SBI Payments

1mo

Congratulations Deep for providing an exhaustive and meaningful read.

Anuradha Mallya

Data Alchemist | Strategic Business Partner | Thought Leadership in AI | Decision Scientist | Mentor

3w

Always a pleasure to hear you in person or read your post 😊 Indeed through this article you have touched the question to existing subliminal prejudices and how one shall approach 👏Looking forward for more reads.

Venkat Iyer

Advisor at Tranquility Advisory LLP

1mo

Loved the article. This was profound...difference between continuous improvement and breakthroughs "The electric bulb did not come from a continuous improvement of candles, to quote Oren Harari. If 19th century candle makers had access to electricity, most would have used it to melt wax faster to make more candles. It is unlikely that they would have invented the light bulb"

Sudhakar Reddy

Director - Applications , Data & AI | IT Automation

1mo

Excellent take..

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