Productivity Paradox: Challenges and Opportunities

Main points

• Back in 1987, the Nobel prize-winning economist Robert Solow observed that ‘you can see the computer age everywhere but in the productivity statistics!’ (quoted in Rotman, 2018). This dichotomy between limited productivity growth and rapid technological progress is now commonly described as the ‘Solow or productivity paradox’.
• At present, the term ‘productivity paradox’ increasingly refers to instances where productivity is either feeble or growing slowly. In the United Kingdom, there has been a slowdown in productivity growth since the Global Financial Crisis (GFC). The economic implications of this slowdown have been far-reaching for London and other regions.