A man looks at a smartphone Thanasak Wanichpan/Getty Images

Is Technology Hurting Productivity?

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.

To continue reading, please log in or enter your email address.

To read this article from our archive, please log in or register now. After entering your email, you'll have access to two free articles from our archive every month. For unlimited access to Project Syndicate, subscribe now.

required

By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in

http://prosyn.org/ZRyzKed;

Handpicked to read next

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.