Is Technology Delivering on Its Promise?

February 2015

Bob Samuelson has written a great, thought-provoking piece [see The Washington Post, Light bulbs vs. the Internet, 15 February 2015]. The basic conclusion is spot-on: the cornucopia of technology is not apparently creating middle class jobs in the quantities needed, and, to boot, there are new dangers – cyber-risks.

Despite a number of economists finding that productivity is falling dramatically, productivity, if it means anything at all outside of jargon, has actually increased immensely. In my work as a lawyer and trade policy analyst and Bob Samuelson’s as an astute columnist, it is evident that productivity has been enhanced vastly – no manual typesetting, not even Ottmar Mergenthaler (inventor of the linotype machine), needed. And with communications, multiple parties can review a document simultaneously and get it into the hands of decision-makers (or publishers) in a matter of seconds. And that is true not just of scribes and policy mavens, but also of the whole business world.  When I came to work at the Treasury in 1968, my boss and I (and his secretary) stayed often until 10 p.m. to get an eight page memo up to the Secretary of the Treasury – currency values were a problem even then.  Typewriters, carbon paper, pencils, dictation pads, messengers – all gone, and sadly research librarians declining in numbers too I suspect. Productivity of the surviving individual has vastly increased, but the numbers of employees to get those same tasks done were more than decimated.  (Putting aside Parkinson’s Law.)

Over the weekend, a research fellow based in the UK, vacationing in Switzerland, asked me a question, and with the aid of internet and a search engine and the web, I got him an answer in a few hours. No librarian, no mail delivery person, no steamship to carry it, etc. To be sure, there were probably cyber threats, my bank account could have been emptied at the same moment, my work stolen as well. And my online search was probably monitored and collected somewhere by some stranger (malevolent or not – all disquieting).

But sticking with the subject of the “decline of productivity,” I have the strong feeling that it is the measuring of it that is at fault, or the definition, not the reality. Productivity itself has exploded. Whatever the risks of GMOs, food supplies will increase. (Benefits and risks, if any, go hand in hand.) Malthus may just end up being a predictor of a lower average wage, but technology has the prospect of addressing the problem he thought the world faced.

The tougher problem is jobs – fewer secretaries, fewer workers in factories. I suspect it is hard to measure the numbers of those working on new apps in some small corner of their homes, but there are no doubt fewer engaged in this endeavour than in the pre-app world workers that their apps may replace. The film processing industry, the music recording industry, the Dictaphone, the digital camera, the game console, the calculator, the TV, the movie theatre, and much more that I am unaware of, all migrated (hard to say they “shrank” when so much more is available) into the smart phone. There is employment in the design assembly and marketing of that phone, but I suspect fewer than in the multiple industries these devices replace, and with globalisation, those assembly jobs are not in the United States or Europe.

As for the risks of new technologies, industrial accidents may have increased over using oxen to plough fields and ploughs to haul everything, I don’t know.  No doubt there more carnage from automobiles than horse drawn carts, but divided by miles travelled, a different result would be found. US agriculture wiped out a lot of UK ag in the 19th century. Not just American land, but technology was the cause. Drones will wipe out more jobs (pipeline and crop inspection, to name two).

What we know is that the costs of slowing technological progress are great and the effort to do so the height of stupidity. Internet access last week in Beijing for me was non-existent to Google, which impaired my work greatly. I could not easily get onto the WTO website (through Yahoo) and stay connected. Productivity declined. No benefit there.

Technology is not an unalloyed good: point taken. Neither was the gift of fire. And Alfred Nobel had some regrets as well. So it goes.

What we can see of today’s innovations are identifiable initial benefits and risks, but we cannot fathom the future employment effects. The economics profession has not figured that one out yet. And I don’t know if early illiteracy yielding to internet (with some intermediate stages) into Facebook is just a parabolic curve. Some further benefits to productivity and society more generally may yet emerge.

There will be all sorts of mixed blessings of the intersection of technology and welfare. Longer life and better health will have some negative impact on economies. We cheer the former and have not gotten that latter part figured out yet.

I do take issue with Samuelson’s label of the “internet’s dubious benefits” – they have been vast, but not evenly distributed. It is a bit of a muddle. Refugees flee poverty, but the internet and radar and satellite imagery rescue them from death in the Mediterranean. The internet spots outbreaks of diseases and technology conquers or contains these scourges. The absence of technology leaves us with the Bubonic Plague – but greatly enhanced productivity as fewer farmers got larger parcels to work, and the Dark Ages moved into the Middle Ages. Economists could cheer. The view of the rest of humanity is less favourable.

The bottom line: it is too early to tell, but I agree that the current age is not unalloyed fun. There have been endless technological breakthroughs from the earliest times – George Eastman is not so much to thank as the Lascaux cave painters. That was the breakthrough innovation – although no doubt it was incremental as well, we just cannot document that fully. And probably at the time the benefits provided by the cave painter were not as clear as the benefits of ultrasound or CT scans are now.  But maybe not, maybe those paintings were a key to survival – showing where the game was and how it could be hunted. All of life, if we are fortunate, is a progression – probably with some downsides from each new technological advance.

The problem Samuelson cites is real – jobs. As for the economists measuring a fall-off in the rate of change of productivity – I have my doubts.

Alan Wolff is a member of the E15 Expert Group on Trade and Innovation. He is Chairman of the National Foreign Trade Council (NFTC) in Washington, D.C. and Senior Counsel at McKenna Long & Aldridge LLP. He also acts as Co-Chair of the Innovation Policy Forum of the Science Technology and Economic Policy Board of the National Academies Washington, D.C.

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