Saturday , April 21 2018
Home / Project Syndicate / Is Technology Hurting Productivity?

Is Technology Hurting Productivity?

Summary:
It is possible that new technologies are not just doing less to boost productivity than past innovations. They may actually have negative side effects that undermine productivity growth, and that reduce our wellbeing in other ways as well. CAMBRIDGE – In recent years, productivity growth in developed economies has been stagnating. The most prominent explanations of this trend involve technology. Technological progress is supposed to increase economies’ productivity and potential growth. So what’s going on? The Year Ahead 2018 The world’s leading thinkers and policymakers examine what’s come apart in the past year, and anticipate what will define the year ahead.

Topics:
Jeffrey Frankel considers the following as important:

This could be interesting, too:

Timothy Taylor writes The Clean Cooking Problem: 2.3 Million Deaths Annually

FT Alphaville writes Further Reading

Tyler Cowen writes Subliminal education?

Miles Kimball writes Christie Aschwanden on Buying Doubt

It is possible that new technologies are not just doing less to boost productivity than past innovations. They may actually have negative side effects that undermine productivity growth, and that reduce our wellbeing in other ways as well.

CAMBRIDGE – In recent years, productivity growth in developed economies has been stagnating. The most prominent explanations of this trend involve technology. Technological progress is supposed to increase economies’ productivity and potential growth. So what’s going on?

Harvard’s Martin Feldstein has argued persuasively that productivity growth is actually higher than we realize, because government statistics “grossly understate the value of improvements in the quality of existing goods and services” and “don’t even try to measure the full contribution,” of new goods and services. Over time, he asserts, these measurement errors are probably becoming more important.

Northwestern University’s Robert Gordon is less optimistic. He has argued – also persuasively – that today’s innovations in areas like information and communications technology (ICT) cannot be expected to have as big an economic payoff as those of the past, such as electricity and the automobile.

But it’s possible that ICT and other new technologies are not just doing less to boost productivity than past innovations; they may actually have some negative side effects that undermine productivity and GDP growth. One need not be a modern-day Luddite to acknowledge the potential productivity pitfalls of technological innovation.

The first might seem obvious: technological disruption is, well, disruptive. It demands that people learn new skills, adapt to new systems, and change their behavior. While a new iteration of computer software or hardware may offer more capacity, efficiency, or performance, those advantages are at least partly offset by the time users have to spend learning to use it. And glitches often bedevil the transition.

The fast-changing nature of today’s digital technologies also raises security challenges. Spam, viruses, cyberattacks, and other kinds of security breaches can impose major costs on businesses and households.

Jeffrey Frankel
Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government, previously served as a member of President Bill Clinton’s Council of Economic Advisers. He directs the Program in International Finance and Macroeconomics at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery.

Leave a Reply

Your email address will not be published. Required fields are marked *