Innovation pessimism_ Has the ideas machine broken down_ _ The Economist

Ac ros s the ec onomy as awholeproduc tiv ity dids

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Unformatted text preview: ting nor a binding c ommitment. It was a c elebration through ex trapolation of then c urrent progres s in s peed, power and dis tanc e. For c ars read fly ing c ars ; for battlec ruis ers read s pac e c ruis ers . Tec hnologic al progres s does not require all tec hnologies to mov e forward in loc k s tep, merely that s ome important tec hnologies are alway s mov ing forward. Pas s enger aeroplanes hav e not improv ed muc h ov er the pas t 40 y ears in terms of their s peed. Computers hav e s ped up immeas urably . Unles s y ou c an s how that planes matter more, to s tres s the s tas is ov er the progres s is s imply a matter of tas te. Mr Gordon and Mr Cowen do think that now­mature tec hnologies s uc h as air trans port hav e mattered more, and play down the ec onomic importanc e of rec ent innov ations . If c omputers and the internet mattered to the ec onomy —rather than merely as ric h res ourc es for intellec tual and c ultural ex c hange, as ex perienc ed on Mr Cowen’s popular blog, Marginal Rev olution—their effec t would be s een in the figures . And it has n’t been. As early as 1987 Robert Solow, a growth theoris t, had been as k ing why “y ou c an s ee the c omputer age ev ery where but in the produc tiv ity s tatis tic s ”. A s urge in produc tiv ity growth that began in the mid­1990s was s een as an enc ouraging s ign that the c omputers were at las t bec oming v is ible; but it faltered, and s ome, s uc h as Mr Gordon, rec k on that the benefits of information tec hnology hav e largely run their c ours e. He notes that, for all its inhabitants ’ Googling and Sk y peing, Americ a’s produc tiv ity performanc e s inc e 2004 has been wors e than that of the doldrums from the early 1970s to the early 1990s . The fountains of paradise Clos er analy s is of rec ent figures , though, s ugges ts reas on for optimis m. Ac ros s the ec onomy as a whole produc tiv ity did s low in 2005 and 2006—but produc tiv ity growth in manufac turing fared better. The global financ ial c ris is a...
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