In a 1987 article, economist Robert Solow highlighted the “productivity paradox,” where increased computing power didn’t translate into better output per worker, a critical factor for wages and living standards. Fast forward to today, a new paradox arises with generative AI. Recent research reveals that despite 45.6% of workers using AI tools and substantial enterprise investments totaling $30-$40 billion, a staggering 95% of organizations see no return on investment. While some companies report benefits, roles in sectors like retail and hospitality remain largely unaffected by AI. Moreover, confidence in AI implementation strategies among CEOs is plummeting, with many citing management failures and the novelty of AI as barriers. Effective AI investments are often narrow and tailored, contrasting with less successful generic applications. This suggests a lengthy adoption process, echoing historical tech trends where transformative tools only maximize impact after complementary infrastructure is in place. Companies face pressing questions: How can they harness AI for tangible benefits?
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