It’s a well-researched oddity of the past few decades is that as technology gets faster, people get slower. Digitisation of the workforce has failed to do what it promised and there’s no agreement as to why.
Economist Robert Solow summarised the problem in 1987, saying: “You can see the computer age everywhere but in the productivity statistics.” Data keep on proving his point. All measures of IT spending have kept trending higher yet since 2005, rates of labour productivity growth at least halved in the US, UK, Japan, Germany and France.
This paradox (sometimes called the productivity puzzle 2.0, in observance of similar trend in the 1970s and 1980s) excites plenty of debate. It might be, as Robert Gordon has argued, that recent technological advances just aren’t that great relative to history. Perhaps, as Jonathan Haskel and Stian Westlake argue, the measure itself is becoming obsolete. Other popular theories involve some combination of structural headwinds, mismeasurement, lag effects, fiscal suppression and a long term return to the mean. What none capture is why constant incremental improvements, rather than arresting a weakening trend, appear to be contributing to it.