Has Productivity Peaked?
Putney Barnes writes "A columnist on silicon.com is arguing that computing can no longer offer the kind of tenfold per decade productivity increases that have been the norm up to now as the limits of human capacity have been reached. From the article: 'Any amount of basic machine upgrading, and it continues apace, won't make a jot of difference, as I am now the fundamental slowdown agent. I just can't work any faster'. Peter Cochrane, the ex-CTO of BT, argues that "machine intelligence" is the answer to this unwelcome stasis. "What we need is a cognitive approach with search material retreated and presented in some context relative to our current end-objectives at the time." Perhaps he should consider a nice cup of tea and a biccie instead?"
Cough
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When you're talking about productivity in the entire economy, you can draw a graph - on the Y axis is "real GDP per capita" while on the X axis is "capital / labor" (K/L for short). If you add more capital (machines, computers, tools) people get more productive, but less so as you add more and more and more. This means the line you graph will start somewhat steep, but then level off as you get higher (not entirely unlike the graph of sqrt(x)). The rough guideline for the economy at present is the "rule of one third" - if you increase your capital stock by 100%, you'll get about 33% more output. This sort of rule determines how much capital we end up having - we will increase our capital stock with investment until we have reached the "target rate of return", which is actually a slope of this productivity curve. This is the point at which investment pays for itself.
Then there are wonderful things like increases in technology. These end up shifting the productivity curve upward: people can do more with their technology than they could before. This increases real GDP per capita directly, but it also means that for the same level of capital, we're below the target rate of return, and can invest in all sorts of new capital, which will pay for itself - so we increase our capital stock as well.
The good news is that technology keeps coming, and while it may not be quite the same Spectacular Breakthrough as the introduction of computers, there is plenty happening in a variety of industries. Take, for example, Wal*Mart (the company everyone loves to hate, yes...) They have achieved a substantial portion of their success by becoming more productive with managing their warehouses and inventories, and are actively looking to increase their productivity in this area. (In fact, I've seen studies that claim they were responsible for the bulk of retail productivity growth in the late 90's, directly or indirectly). "Supply chain management" is trendy. And perhaps some day we will see RFID tags at the check-out line (to replace the last great checkout productivity enhancer, bar codes).
The World Wide Web is dying. Soon, we shall have only the Internet.
Commodore64_love: I don't comprehend people who're so frightened of death that they'll bankrupt themselves to stay alive