Innovation pessimism_ Has the ideas machine broken down_ _ The Economist

the ec onomist c ars fromtheprinteditionbriefing rec

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Unformatted text preview: hows firms in ric h c ountries s hipping low­s k ill tas k s abroad when offs horing c os ts little, thus driv ing apart the wages of s k illed and uns k illed work ers at home. Ov er time, though, offs horing rais es wages in les s ­s k illed c ountries ; that mak es innov ation at home more entic ing. Work ers are in greater demand, the inc ome dis tribution narrows , and the ec onomy c omes to look more lik e the pos t­s ec ond­world­war period than the 1970s and their aftermath. Ev en if that model is mis tak en, the ris e of the emerging world is among the bigges t reas ons for optimis m. The larger the s iz e of the global mark et, the more the world benefits from a giv en new idea, s inc e it c an then be applied ac ros s more ac tiv ities and more people. Rais ing As ia’s poor billions into the middle c las s will mean that millions of great minds that might otherwis e hav e toiled at s ubs is tenc e farming c an ins tead join the modern ec onomy and s hare the burden of k nowledge with ric h­world res earc hers —a s haring that information tec hnology mak es ev er eas ier. It may s till be the c as e that s ome parts of the ec onomy are immune, or at leas t res is tant, to s ome of the produc tiv ity improv ement that information tec hnology c an offer. Sec tors lik e health c are, educ ation and gov ernment, in whic h produc tiv ity has prov ed hard to inc rea...
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