The productivity conundrum
Has the internet revolution helped or hindered economic growth?
As every Swampian knows, economic growth is nothing more than productivity plus demographics. Given that birth rates in most parts of the world are falling, bolstering productivity is crucial for ensuring that our children have a better standard of life than we do. Yet at a time when there appears to be more productivity bolstering technology around us than ever before, productivity rates are stubbornly flat. Why is this? Some academics, like Robert Gordon at Northwestern University, who wrote the fine book The Rise and Fall of American Growth, think that the digital revolution simply isn’t all that. He points out that we got a far greater boost to standards of living from the Industrial Revolution than the advent of computers (Gordon loves to poll people as to whether they’d rather have running water and electricity or an iPhone). He also points out that it took 70 years for the gains of the Industrial Revolution to flow through society, and we are only about 20 years or so into the internet revolution.
Others – most notably those in Silicon Valley – feel that we aren’t measuring productivity correctly. One high-level executive at Google once told me that he felt YouTube was their contribution to American industrial policy, in the sense that it allowed hairdressers or make-up artists or furniture makers to create and monetise content about their trades. I checked in with Jonathan Taplin, the Big Tech critic and author of Move Fast and Break Things about this, and he pointed out that it takes about 2m YouTube hits to make $20,000. Not exactly a replacement for the steel mill or auto line jobs of the past.
There is, in fact, another line of thought developing around the productivity conundrum, and that is that technology itself may be part of the problem, as well as the solution. Economist Alan Blinder, of whom I’m a big fan (his sense of humour alone is welcome in the dismal science) has for years raised the possibility that high-speed digital technology – email, apps, etc – are actually reducing productivity by taking us away from our work. As he told me over email: “I’m becoming a bigger and bigger believer of this, because of conversations I’ve had with people who actually run businesses.”
© Alamy
He’s not alone. Consider the advertising executive who banned phones and found that his employees regained hours of productive work. Or the June 2016 survey from Career Builder that found that one in five bosses believe that their employees are productive only five hours a day, and over half of them blame the cell phone and its distractions for that. It’s no wonder, given that other studies have shown that the average person touches their phone 2,617 times a day. Just searching through emails for information has become a time drag.
Of course, these same bosses who see phones and apps as a workplace productivity killer also believe that being connected outside of work is a good thing. On balance, I’d agree. I couldn’t balance my work and family responsibilities as I do without being able to log in as I like, when I like. But I also find that I’m experimenting more and more with staying offline as long as possible during the work day, checking email, say, three times a day and no more, in order to stay more focused on the tasks at hand. It’s the only way to have thoughts that are deeper than 140 characters – which other academic research shows may be the best way to stay competitive in your career. I’d be curious to know how you think about this topic, Ed, and what other Swampians do to keep themselves connected, and yet productive.
Recommended reading
* I was intrigued by this piece from Noah Smith, a Bloomberg opinion columnist, about how economics – like psychology – is having a replication crisis. It looks like theory and real world experience often don’t replicate themselves. I think that the economics profession, which continues to engage in that fantasy that it’s a hard science like physics, rather than a murkier soft science, needs to take this point to heart more.
* This speech from former Obama secretary of defense Ash Carter, now at Harvard, illuminates the tech nationalism that I think will be front and center in the continuing US-China trade conflict.
* And here’s another fascinating piece, from Harvard professor and New Yorker staff writer Jill Lepore, about the history of technological change and political disruption.
* Looks like the EU is listening to what the FT has been writing about Amazon.
* Also in the pages of the FT, I enjoyed this personal opinion piece by my colleague Anne-Sylvaine Chassany about her son’s continued attachment to London after spending a few years in Paris. I had a similar experience when I moved my children from London to New York. Even for cosmocrats, place still matters …
Edward Luce responds
Thanks Rana. I would certainly prefer to have running water than a smartphone, though if I could guarantee an uninterrupted supply of both that would be splendid. As regards the distraction/empowerment debate on iPhones, this is partly generational. I think we’re from the fortunate generation that were raised before the internet became widely available, and thus learned to love reading, but were still young enough to become technoliterate. It’s millennials and iGens that I worry about. That said, millennials do suffer from an unfair profile. As the joke goes, everyone hates millennials until they need to convert a PDF document into Word.