The Solow Paradox Returns

In 1987, Robert Solow observed that the computer age could be seen everywhere except in the productivity statistics. Companies were spending billions on information technology; the computers were visibly present on every desk; the macroeconomic productivity numbers were flat. The paradox haunted the industry for a decade. The resolution came from multiple directions: measurement error, the time required for organizational restructuring, the fact that productivity gains from IT appeared only after the reorganization of work around the computer. The AI transition is replaying the pattern. Enterprise AI spending follows a trajectory that mirrors IT spending in the 1980s and 1990s. AI tools are visibly present in workflows. And macroeconomic productivity has not yet reflected the transformative impact the investment levels would predict. Meeker's 2025 report positions this gap within the historical pattern — counseling patience, since the productivity will come as organizations restructure to exploit the new capabilities.