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Posts Tagged ‘Productivity’

Rethinking Productivity

Posted by hkarner - 6. November 2019

Diane Coyle is Professor of Public Policy at the University of Cambridge.

Today, about four out of every five dollars spent in the OECD economies purchases services or intangible goods. This “dematerialization” of economies demands a more nuanced understanding of what drives productivity.

CAMBRIDGE – The word “productivity” typically calls to mind industrial assembly lines pumping out cars or washing machines, breakfast cereal or shoes. The word may also conjure images of crops being harvested, livestock being butchered, or houses being built. It is less likely to elicit thoughts of haircuts, streaming television, or mortgages. Yet nowadays, it is largely these kinds of intangible goods and services that define economies.

Many economists equate “total factor productivity” with technological progress. Northwestern University’s Robert Gordon, for example, predicts that productivity growth will continue to slow – as it has done in most developed economies since the mid-2000s – because today’s digital innovations are, in his view, less transformative than earlier advances like the flush toilet, radio, and the internal combustion engine. Den Rest des Beitrags lesen »

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Unwinding the Personal Productivity Paradox

Posted by hkarner - 10. Juni 2019

Date: 09-06-2019
Source: The Wall Street Journal By Irving Wladawsky-Berger

So much tech, so little time

The past 10 to 15 years have seen a number of technology advances, from smartphones to machine learning. Yet, despite these impressive advances, economies around the world have been stuck in an era of slow productivity growth. Opinions abound, but in the end, there’s no consensus on the causes of this apparent productivity paradox, on how long the slowdown will likely last, or on what to do about it.

Companies and industries are not the only ones trying to adjust to our fast changing digital economy. Individuals are also experiencing their own version of the productivity paradox.

In principle, the advent of smartphones, apps, and other major technologies should save us time and make our lives easier. But, as we well know, that’s not quite been the case. Article after article reminds us that thanks to the internet and smartphones, everybody is available all the time; that work can feel like a never-ending cycle of overflowing inboxes and urgent demands; that no matter how hard we work, we’re overloaded and overwhelmed because there’s far more to do every day than there is time to do it. Den Rest des Beitrags lesen »

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Mind the Productivity Gap to Reduce Inequality

Posted by hkarner - 8. Mai 2019

Date: 07-05-2019
Source: The Wall Street Journal By Edward P. Lazear

It isn’t only an American problem, but the U.S. has lessons to learn from other wealthy countries.

How are American workers doing? Neither the middle class nor the poor have fared well in recent decades—but don’t blame tax cuts, a too-low minimum wage or the greed of the 1%. In rich countries around the world, the top half of the income distribution has been pulling away from the bottom half. Productivity growth among high-wage workers, driven by technological change, is the reason.

When measuring wage dispersion, economists frequently look at the 90/50 ratio—the wage of the worker at the 90th percentile divided by the wage of the worker at the median. In 2017 the 90th-percentile worker earned around $108,000, while the median worker earned around $45,000 a year—a ratio of 2.4. That’s an increase from 2.2 since 1997. Over the same period, the 50/10 ratio—the median wage divided by the wage at the 10th percentile—stayed flat, at 2.1. Den Rest des Beitrags lesen »

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The Digital Revolution’s Silent Majority

Posted by hkarner - 18. April 2019

Edoardo Campanella

Edoardo Campanella is a Future of the World Fellow at the Center for the Governance of Change of IE University in Madrid.

An abiding mystery of the twenty-first-century economy is tepid productivity growth despite the emergence of cutting-edge technologies with the potential to disrupt entire industries. But there could be a simple explanation: the attention these technologies receive is wildly disproportionate to their scale and scope.

MILAN – Statistics can hold brutal truths. We are constantly told that innovation is occurring faster than ever, yet the data coming out of the so-called Fourth Industrial Revolution suggest that it is anything but revolutionary. Among advanced economies, productivity growth is the slowest it’s been in 50 years.

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The Current State of AI Adoption

Posted by hkarner - 10. Februar 2019

Date: 10-02-2019
Source: The Wall Street Journal By Irving Wladawsky-Berger

Artificial Intelligence is seemingly everywhere. In the past few years, the necessary ingredients have finally come together to propel AI beyond early adopters to a broader marketplace: powerful, inexpensive computer technologies; advanced algorithms; and huge amounts of data on almost any subject. Newspapers and magazines are full of articles about the latest advances in machine learning and related AI technologies.

Two recent reports concluded that, over the next few decades, AI will be the biggest commercial opportunity for companies and nations. AI advances have the potential to increase global GDP by up to 14% between now and 2030, the equivalent of an additional $14 to 15 trillion contribution to the world’s economy, and an annual average contribution to productivity growth of about 1.2 percent.

Over time, AI could become a transformative, general purpose technology like the steam engine, electricity, and the internet. AI marketplace adoption will likely follow a typical S curve pattern with a relatively slow start in the early years, followed by a steep acceleration as the technology matures and firms learn how to best leverage AI for business value. Den Rest des Beitrags lesen »

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The Zero-Sum Economy

Posted by hkarner - 17. August 2018

Adair Turner, a former chairman of the United Kingdom’s Financial Services Authority and former member of the UK’s Financial Policy Committee, is Chairman of the Institute for New Economic Thinking. His latest book is Between Debt and the Devil.

The anthropologist David Graeber has argued that as much as 30% of all work is performed in “bullshit jobs,” which are unnecessary to produce truly valuable goods and services but arise from competition for income and status. But the deeper problem is that more and more economic activity performs a merely distributive function.

LONDON – Across the global economy, the potential for automation seems huge. Adidas’ “Speedfactory” in Bavaria will employ 160 workers to produce 500,000 pairs of shoes each year, a productivity rate over five times higher than in typical factories today. The British Retail Consortium estimates that retail jobs could fall from three million to 2.1 million within ten years, with only a small fraction replaced by new jobs in online retailing. Many financial-services companies see the potential to cut information-processing jobs to a small fraction of current levels.

And yet, despite all this, measured productivity growth across the developed economies has slowed. One possible explanation, recently considered by Andrew Haldane, chief economist of the Bank of England, is that while some companies rapidly grasp the new opportunities, others do so only slowly, producing a wide productivity dispersion even within the same sector. But dispersion alone cannot explain slowing productivity growth: that would require an increase in the degree of dispersion. Den Rest des Beitrags lesen »

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The Problem With Innovation: The Biggest Companies Are Hogging All the Gains

Posted by hkarner - 17. Juli 2018

Date: 16-07-2018
Source: The Wall Street Journal By Jason Douglas,  Jon Sindreu and  Georgi Kantchev

Economists trying to explain a long-term slowdown in productivity increasingly believe gains are not spreading through the economy, as they once did

As far back as the industrial revolution, major innovations have traveled swiftly from company to company and industry to industry, an economy-boosting phenomenon called diffusion.

Today, there is mounting evidence this engine of growth seems to be misfiring, a phenomenon some economists say helps explain the slowdown in productivity growth bedeviling developed economies.

Productivity, usually measured as output per hour or per worker, refers to the efficiency with which goods and services are produced in an economy. Boosting productivity—raising the amount of goods and services produced by each worker—is one of the most important long-term drivers of rising living standards.

Lately, economists have discovered an unsettling phenomenon: While top companies are getting more productive, gains are stalling for everyone else. And the gap between the two is widening, with globalization and new technology delivering outsize rewards to the titans of the global economy. Den Rest des Beitrags lesen »

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Big Tech Is a Big Problem

Posted by hkarner - 3. Juli 2018

KennKenneth Rogoffeth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. The co-author of This Time is Different: Eight Centuries of Financial Folly, his new book, The Curse of Cash, was released in August 2016.

The prosperity of the US has always depended on its ability to harness economic growth to technology-driven innovation. But right now Big Tech is as much a part of the problem as it is a part of the solution.

CAMBRIDGE – Have the tech giants – Amazon, Apple, Facebook, Google, and Microsoft – grown too big, rich, and powerful for regulators and politicians ever to take them on? The international investment community seems to think so, at least if sky-high tech valuations are any indication. But while that might be good news for the tech oligarchs, whether it is good for the economy is far from clear.

To be fair, the tech sector has been the United States’ economic pride and joy in recent decades, a seemingly endless wellspring of innovation. The speed and power of Google’s search engine is breathtaking, putting extraordinary knowledge at our fingertips. Internet telephony allows friends, relatives, and co-workers to interact face to face from halfway around the world, at very modest cost.

Yet, despite all this innovation, the pace of productivity growth in the broader economy remains lackluster. Many economists describe the current situation as a “second Solow moment,” referring to legendary MIT economist Robert Solow’s famous 1987 remark: “You can see the computer age everywhere but in the productivity statistics.” Den Rest des Beitrags lesen »

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Eine Lösung für das Produktivitäts-Puzzle

Posted by hkarner - 13. Mai 2018

James Manyika

James Manyika is Chairman of the McKinsey Global Institute and a senior partner in McKinsey & Company’s San Francisco Office.

Myron Scholes, a Nobel laureate in economics, is the Frank E. Buck Professor of Finance, Emeritus, at the Stanford Graduate School of Business and co-originator of the Black-Scholes options pricing model.

SAN FRANCISCO – Seit Jahren ist eines der großen Rätsel in der Wirtschaft für das sinkende Produktivitätswachstum in den Vereinigten Staaten und anderen fortgeschrittenen Volkswirtschaften verantwortlich. Ökonomen haben eine Vielzahl von Erklärungen vorgeschlagen, von ungenauen Messungen über „säkulare Stagnation” bis hin zu der Frage, ob die jüngsten technologischen Innovationen produktiv sind.

Aber die Lösung des Rätsels scheint darin zu liegen, wirtschaftliche Zusammenhänge zu verstehen, anstatt einen einzigen Schuldigen zu identifizieren. Und in diesem Punkt kommen wir möglicherweise der Frage auf den Grund, warum sich das Produktivitätswachstum verlangsamt hat.

Betrachtet man das Jahrzehnt seit der Finanzkrise 2008 – eine Zeit, die für die starke Verschlechterung des Produktivitätswachstums in vielen Industrieländern bemerkenswert ist -, so lassen sich drei herausragende Merkmale feststellen: ein historisch niedriges Wachstum der Kapitalintensität, die Digitalisierung und eine schwache Nachfrageerholung. Zusammengenommen erklären diese Merkmale, warum das jährliche Produktivitätswachstum zwischen 2010 und 2014 um durchschnittlich 80 % auf 0,5 % gesunken ist, gegenüber 2,4 % ein Jahrzehnt zuvor. Den Rest des Beitrags lesen »

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Rethinking the Twenty-First-Century Economy

Posted by hkarner - 17. April 2018

Margareta Drzeniek-Hanouz

Margareta Drzeniek-Hanouz is Head of the Economics Unit at the World Economic Forum.

With the rise of digital technologies and big data, the global economy is undergoing a fundamental transformation that poses significant challenges to governments and policymakers. Unless tools are developed to measure new sources of value in the real economy, current and future generations‘ wellbeing will be in jeopardy.

GENEVA – Before the threat of a US-China trade war arose, surging stock markets and corporate profits had obscured the fact that the global economic system is under existential stress. Global financial stability remains considerably in doubt. Indeed, as world financial leaders gather for the annual IMF/World Bank spring conference in Washington, DC, the rapid pace of technological change and rising inequality are fueling ever louder calls for root-and-branch revision of the entire system.

For governments to cope with these mounting pressures, they will need to rethink the key policy tools on which they have relied for well over a century, starting first and foremost with taxation.

Death and taxes may have been the only certainties in the world of Benjamin Franklin two centuries or so ago; today, only death remains undeniable. With the rise of the digital economy, more and more economic value is derived from intangibles such as the data collected from digital platforms, social media, or the sharing economy. And because company headquarters can now be moved between countries with ease, governments are finding it ever harder to raise taxes. At the same time, public spending will likely have to increase to meet the demands of those left behind in the era of globalization and digital technologies.1 Den Rest des Beitrags lesen »

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