To become wealthier, a country needs strong growth in productivity—the
output of goods or services from given inputs of labor and capital.
However, productivity growth in most of the world’s rich countries has
remained dismal since around 2004.
What is the productivity paradox? Total factor productivity—the part that accounts for the contributions of innovation and technology—has also been sluggish. In a time of smartphones and self-driving cars, how can the key economic measure of technological progress be so pathetic? This is the “productivity paradox.”
Why is it happening? We’ve seen this before. In 1987 MIT economist Robert Solow, quipped that “you can see the computer age everywhere but in the productivity statistics.” But within a few years that changed as productivity climbed throughout the mid and late 1990s. What’s happening now may be a “replay of the late ’80s,” says Erik Brynjolfsson, another MIT economist. Breakthroughs in machine learning and image recognition are “eye-popping”; the delay in implementing them only reflects how much change that will entail.
SOURCE: MIT DOWNLOAD
What is the productivity paradox? Total factor productivity—the part that accounts for the contributions of innovation and technology—has also been sluggish. In a time of smartphones and self-driving cars, how can the key economic measure of technological progress be so pathetic? This is the “productivity paradox.”
Why is it happening? We’ve seen this before. In 1987 MIT economist Robert Solow, quipped that “you can see the computer age everywhere but in the productivity statistics.” But within a few years that changed as productivity climbed throughout the mid and late 1990s. What’s happening now may be a “replay of the late ’80s,” says Erik Brynjolfsson, another MIT economist. Breakthroughs in machine learning and image recognition are “eye-popping”; the delay in implementing them only reflects how much change that will entail.
SOURCE: MIT DOWNLOAD
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