Generative AI for Enterprise

With the arrival of ChatGPT technology, tech companies envision automation of many processes that used to require humans carried by Human Resources and by tech developers – leading among other reasons to large-scale layoffs across the tech industry in 2023.

Significant investments in artificial intelligence (AI) have been made aiming for an improvement methodology focused on process optimization and waste reduction – as a way to increase productivity while reducing costs. The outcome of these changes will be closely watched by those affected by them – both employees and shareholders alike – for years to come.

This article brings my views on the notion of the productivity paradox in 2023 where the global economic outlook indicates slow growth with inflation and interests rates rising after recovering since the Covid pandemic. I also raise the question about how to approach generative AI can take in the corporate world? I will conclude with key takeways to bear in mind for leaders intending to include that tool in their strategy.

What is the Productivity Paradox?

For more than 50 years, businesses have been using computers. They have spent a lot of money on computer technologies. But did all this investment in IT make a difference? Did it make people more productive?

Are companies that invest in IT more competitive? Even if IT can help organizations, the investment still relies on a strategy made by humans. Humans are not perfect, so the strategy might not be either.

But before jumping into such ideas, let’s have a look at the concept of the Productivity Paradox first to establish a common base.

In 1991, Erik Brynjolfsson published a groundbreaking article in the Communications of the ACM that explored an intriguing phenomenon: “The Productivity Paradox of Information Technology.”

Through comprehensive research and assessment, this paper opened up valuable conversations regarding how information technology affects productivity.

Through analyzing research on the influence of IT expenditure on efficiency, Brynjolfsson determined that the addition of information technology to business had not spurred productivity at all – hence, the baffling “productivity paradox.”

Drawing on concrete conclusions from this discovery, the author’s analysis leaves us with a perplexing paradox: how can IT have invested so much effort without producing any discernible results?

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