{"id":1946,"date":"2019-09-12T03:46:33","date_gmt":"2019-09-12T03:46:33","guid":{"rendered":"http:\/\/kusuaks7\/?p=1551"},"modified":"2024-04-16T11:15:06","modified_gmt":"2024-04-16T11:15:06","slug":"lets-face-facts-the-digital-revolution-has-been-a-huge-disappointment","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/bigdata-cloud\/lets-face-facts-the-digital-revolution-has-been-a-huge-disappointment\/","title":{"rendered":"Let\u2019s Face Facts, The Digital Revolution Has Been A Huge Disappointment"},"content":{"rendered":"\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tOne of the most often repeated episodes in the history of technology is when\u00a0Steve Jobs<\/a>\u00a0was recruiting\u00a0John Sculley<\/a>\u00a0from his lofty position as CEO at Pepsi to come to Apple. \u201cDo you want to sell sugar water for the rest of your life,\u201d Jobs asked, \u201cor do you want to come with me and change the world?\u201d\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tIt\u2019s a strange conceit of digital denizens that their businesses are something nobler than other industries. While it is true that technology can do some wonderful things if the aim of Silicon Valley entrepreneurs was truly to change the world, why wouldn\u2019t they apply their formidable talents to something like curing cancer or feeding the hungry?\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThe reality, as economist\u00a0Robert Gordon<\/a>\u00a0explains in the\u00a0The<\/em>\u00a0Rise and Fall of American Growth<\/a>, is that the measurable impact has been relatively meager.\u00a0According to the IMF<\/a>, except for a relatively short burst in\u00a0 growth between 1996 and 2004, productivity has been depressed since the 1970s. We need to rethink how technology impacts our world.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

The Old Productivity Paradox<\/strong><\/h2><\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tIn the 1970s and 80s, business investment in computer technology was increasing by more than 20% per year. Strangely though, productivity growth had decreased during the same period. Economists found this turn of events so strange that they called it the\u00a0productivity paradox<\/a>\u00a0to underline their confusion.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThe productivity paradox dumbfounded economists because it violated a basic principle of how a free market economy is supposed to work. If profit seeking businesses continue to make substantial investments, you expect to see a return. Yet with IT investment in the 70s and 80s, firms continued to increase their investment with negligible measurable benefit.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tA\u00a0paper<\/a>\u00a0by researchers at the University of Sheffield sheds some light on what happened. First, productivity measures were largely developed for an industrial economy, not an information economy. Second, the value of those investments, while substantial, were a small portion of total capital investment. Third, businesses weren\u2019t necessarily investing to improve productivity, but to survive in a more demanding marketplace.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tYet by the late 1990s, increased computing power combined with the Internet to create a new productivity boom. Many economists hailed the digital age as a \u201cnew economy\u201d of\u00a0increasing returns<\/a>, in which the old rules no longer applied and a small initial advantage would lead to market dominance. The mystery of the productivity paradox, it seemed, had been solved. We just needed to wait for the technology to hit critical mass.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

The New Productivity Paradox<\/strong><\/h2><\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tBy 2004, the law of increasing returns was there for everyone to see. Google already dominated search, Amazon ruled e-commerce, Apple would go on to dominate mobile computing and Facebook would rule social media. Yet as the dominance of the tech giants grew, productivity would once again fall to depressed levels.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tYet today, more than a decade later, we\u2019re in the midst of a\u00a0second productivity paradox<\/a>, just as mysterious as the first one. New technologies like mobile computing and artificial intelligence are there for everyone to see, but they have done little, if anything, to boost productivity. \t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tAt the same time the power of digital technology is diminishing. Moore\u2019s law, the decades old paradigm of continuous doubling in the power of computer processing\u00a0is slowing down<\/a>\u00a0and soon will end completely. Without advancement in the underlying technology, it is hard to see how digital technology will ever power another productivity boom.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tConsidering the optimistic predictions of digital entrepreneurs like Steve Jobs, this is incredibly disappointing. Compare the meager eight years of elevated productivity that digital technology produced with the\u00a050-year boom in productivity<\/a>\u00a0created in the wake of electricity and internal combustion and it\u2019s clear that digital technology simply doesn\u2019t measure up.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

The Baumol Effect, The Clothesline Paradox And Other Headwinds<\/strong><\/h2><\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tMuch like the first productivity paradox, it\u2019s hard to determine exactly why the technological advancement over the last 15 years has amounted to so little. Most likely, it is not one factor in particular, but the confluence of a number of them. Increasing productivity growth in an advanced economy is no simple thing.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tOne possibility for the lack of progress is the\u00a0Baumol effect<\/a>, the principle that some sectors of the economy are resistant to productivity growth. For example, despite the incredible efficiency that Jeff Bezos has produced at Amazon, his barber still only cuts one head of hair at a time. In a similar way, sectors like healthcare and education, which require a large amount of labor inputs that resist automation, will act as a drag on productivity growth.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tAnother factor is the\u00a0Clothesline paradox<\/a>, which gets its name from the fact that when you dry your clothes in a machine, it figures into GDP data, but when you hang them on a clothesline, no measurable output is produced. In much the same way, when you use a smartphone to take pictures or to give you directions, there is considerable benefit that doesn\u2019t result in any financial transactions. In fact, because you use less gas and don\u2019t develop film, GDP decreases somewhat.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tAdditionally, the economist Robert Gordon, mentioned above, notes\u00a0six headwinds to economic growth<\/a>, including aging populations, limits to increasing education, income inequality, outsourcing, environmental costs due to climate change and rising household and government debt. It\u2019s hard to see how digital technology will make a dent in any of these problems.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

Technology Is Never Enough To Change The World<\/strong><\/h2><\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tPerhaps the biggest reason that the digital revolution has been such a big disappointment is because we expected the technology to largely do the work for us. While there is no doubt that computers are powerful tools, we still need to put them to good use and we have clearly missed opportunities in that regard.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThink about what life was like in 1900, when the typical American family didn\u2019t have access to running water, electricity or gas powered machines such as tractors or automobiles. Even something simply like cooking a meal took hours of backbreaking labor. Yet investments in infrastructure and education combined with technology to produce prosperity.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tToday, however, there is no comparable effort to invest in education and healthcare for those who cannot afford it, to limit the effects of climate change, to reduce debt or to do anything of significance to mitigate the headwinds we face. We are awash in nifty gadgets, but in many ways, we are no better off than we were 30 years ago.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tNone of this was inevitable, but the somewhat the results of choices that we have made. We can, if we really want to, make different choices in the days and years ahead. What I hope we have learned from our digital disappointments is that technology itself is never enough. \u00a0We are truly the masters of our fate, for better or worse.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

One of the most often repeated episodes in the history of technology is when\u00a0Steve Jobs\u00a0was recruiting\u00a0John Sculley\u00a0from his lofty position as CEO at Pepsi to come to Apple. \u201cDo you want to sell sugar water for the rest of your life,\u201d Jobs asked, \u201cor do you want to come with me and change the world?\u201dIt\u2019s<\/p>\n","protected":false},"author":622,"featured_media":3916,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[187],"tags":[95],"ppma_author":[3337],"class_list":["post-1946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bigdata-cloud","tag-big-data-amp-technology"],"authors":[{"term_id":3337,"user_id":622,"is_guest":0,"slug":"greg-satell","display_name":"Greg Satell","avatar_url":"https:\/\/www.experfy.com\/blog\/wp-content\/uploads\/2020\/04\/medium_09100e21-0736-4ca7-ac55-7140c8c4d9d2-150x150.jpg","user_url":"https:\/\/www.gregsatell.com\/%20","last_name":"Satell","first_name":"Greg","job_title":"","description":"Greg Satell is an international keynote speaker, adviser and bestselling author of Cascades: How to Create a Movement that Drives Transformational Change. His previous effort, Mapping Innovation, was selected as one of the best business books of 2017. You can learn more about Greg on his website, GregSatell.com<\/a> and follow him on Twitter<\/a>.\u00a0\u00a0\u00a0 \u00a0"}],"_links":{"self":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/1946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/users\/622"}],"replies":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/comments?post=1946"}],"version-history":[{"count":4,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/1946\/revisions"}],"predecessor-version":[{"id":36617,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/1946\/revisions\/36617"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media\/3916"}],"wp:attachment":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media?parent=1946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/categories?post=1946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/tags?post=1946"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/ppma_author?post=1946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}