Tech’s Productivity Paradox
How the digital revolution has been a huge economic disappointment
One of the most often-repeated episodes in the history of technology is when Steve Jobs was recruiting John Sculley from his lofty position as CEO at Pepsi to come to Apple in 1983. “Do you want to sell sugar water for the rest of your life,” Jobs asked, “or do you want to come with me and change the world?”
It’s a strange conceit of digital denizens that their businesses are something nobler than other industries. While it is true that technology can do some wonderful things, if the aim of Silicon Valley entrepreneurs were truly to change the world, why wouldn’t they apply their formidable talents to something like curing cancer or feeding the hungry?
The reality, as economist Robert Gordon explains in The Rise and Fall of American Growth, is that the measurable impact has been relatively meager. According to the International Monetary Fund, except for a relatively short burst in growth between 1996 and 2004, productivity has been depressed since the 1970s. We need to rethink how technology impacts our world.
The old productivity paradox
In the 1970s and ’80s, business investment in computer technology was increasing by more than 20% per year. Strangely, though…
