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Our Economy’s Productivity Plateau

I’m of the age where we have bridged the digital divide. I saw how computers have made seemingly slow inroads in more and more of our lives. As a child, if I wanted information, I had to go to a book, maybe an encyclopedia or perhaps a knowledgeable adult. When we traveled, there was always a navigator who was looking at a map and keeping the driver informed of the next turn. Complex calculations required a piece of paper and a calculator, I even remember using an abacus. Phone calls were only made from fixed positions and text messages were notes written on a piece of paper and hand delivered.

While there is a sharp contrast in the convenience of the technology we have today, what is interesting is with that convenience, we don’t really get things done any faster. Having an easy to access GPS navigator may eliminate the need to occasionally stop and ask for directions, we still have to drive at roughly the same speeds. We can find information faster, but we don’t seem to do anything better with that knowledge.

As an engineer that saw both hand drawings and computer-aided design, I anticipated that designs would come dramatically faster with computers. I was really surprised to see that designing with CAD did not decrease the design time. We are able to get more detailed models, solve issues before they are manufactured and usually reduce the hard cost of development, but it still takes about the same time. Some would even argue that it takes longer now. Why is that?

This, of course, isn’t limited to just engineering, it goes across the entire economy. We do have more data, and we are learning a great deal from that data, but that data isn’t making us more productive. Productivity is the value that is created in a given timeframe and we still generate roughly the same value in the same amount of time as we did 50 years ago.

I would propose that the industrial revolution and our ability to innovate in that toolset hit the optimal point half-century ago. The machines that humans use to do things faster and better have stabilized and the improvements have not significantly increased outputs. Cars, tractors, factory automation, shipping, distribution, etc. each of these areas is only marginally better than they were a half-century ago. Add to that, the cost and effort to make those improvements may have outweighed the productivity gains or just evened them out.

How do we improve productivity, if we still think that is the goal? The answer seems to be rooted in how productivity is measured, the output per person over time. The limitation is in the person. A person seems to have a finite ability in augmenting the machines that they control. We need to eat, sleep, and engage in a range of activities to keep our minds sharp. Study after study has shown that increasing a human’s time on the job, doesn’t improve productivity, especially when thinking is the primary requirements. How do we get past the human? We need the machine to start thinking!

The idea that the machine can think, or should think has been around for a long time. This has been both anticipated and feared. To have our machines prepare our food, keep our environment tidy and take care of the menial parts of our life is very compelling. We could end up becoming slaves to our machines is what is feared. For us to be more productive though, we need the machine to discriminate at a level that we would call intelligence. For the car to drive, it needs to be able to react to unforeseen changes in the road. For a good haircut from a machine, it needs a sense of style. For a machine to design a building, it needs to make countless decisions that are subjective in nature.

With the many ideas about how this future looks, I see the same potential for good and ill that technology improvements have made throughout my life. I don’t see the machines primarily looking like humans as has permeated our vision of the future. I think most of our smart machines will continue to look like appliances. I think that we will see new machines that tend to look and act more like insects or small animals, machines that can move, monitor and react to the world around us. Machines that are cheap, efficient and specialize in specific tasks. Productivity will then happen with the machines directing themselves without the need for humans to direct every step of the process. The wheels are already in motion for this change to take place, how long it takes to move to this economy is now the question.