IT Productivity Paradox

IT Productivity Paradox or Information Technology Productivity Paradox or Solow computer paradox is the peculiar observation made in business process analysis that, as more investment is made in information technology, worker productivity may go down instead of up.

This observation has been firmly supported with empirical evidence from the 1970s to the early 1990s. This is highly counter intuitive. Before investment in IT became widespread, the expected return on investment in terms of productivity was 3-4%. This average rate developed from the mechanization/automation of the farm and factory sectors. With IT though, the normal return on investment was only 1% from the 1970s to the early 1990s. [1]

Solow Computer Paradox

Economist Robert Solow famously said in 1987 that the computer age was everywhere except for the productivity statistics. This phenomenon became known as the Solow Paradox. [2]

See Also


  1. What is IT Productivity Paradox [1]
  2. What is the Solow Paradox [2]