technology and the productivity paradox

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“Technology feeds on itself. Technology makes more technology possible.”

Alvin Toffler

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“I love technology and doubly love people; it’s the connection that’s out of whack.”

Jaron Lanier

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“The great growling engine of change – technology.”

Alvin Toffler

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The so-called paradox is that with increasing technology use we are not seeing a corresponding productivity increase. The entire discussion gets even a little wackier in that many of the so-called paradox analysts keep comparing it to electricity. Anyway. Here is my cent and a half on this topic.

First. I sometimes think we get confused in this discussion where we confuse technology growth with productivity growth. By that we seem to continuously seek to find some link, or intertwined relationship, when maybe it is best for us to evaluate productivity, as productivity, and technology, as technology. That doesn’t mean we probably shouldn’t seek some correlations, but not treat the entire relationship as causal. Personally, and I am not a systems analyst nor an economist, I would seek out what Donella Meadows called ‘leverage points’, kind of the times and places in which the factors aligned, and see what correlations occurred and what dynamics existed that may have permitted the leverage point to emerge. What that means is maybe increased productivity is contextual and time-constrained; not structural. Ponder that.

Second. Technology can gain its own momentum. Technology begets technology and mastering one technology gives rise to not only new technologies, but new technology wants and needs (basically a technology can create a future market within people’s minds as they wonder “why can’t?” and someone creates to say “you can”). I would suggest if you think about technology that way then technology becomes less of ‘the enemy’ or some adversary, but rather an extension of people’s thinking of progress. What that means is maybe technology doesn’t increase productivity, until it does.

Which leads me to speed.

I am not talking about speed as in how fast we can go, but rather speed in terms of our expectations. We are a hasty, impatient, species. It only got worse in the industrial age which was driven by the clock. Our speed became measured and, as a consequence, we began measuring our expectations. Everything lost its natural set of rhythms and patterns and assumed a measured rhythm and pattern. This isn’t to suggest things do not have rhythms and patterns, just that through the clock we have crammed the natural into the unnatural (side note: I imagine this is why we are so often disappointed because the things rhythm/pattern never exactly matches the unnatural rhythm/patterns so nothing is ever nice and tidy). In addition, once we had clocks, we constructed a structural rhythm and a pattern from which we could leverage productivity across all aspects of business, life and society. Once again, I would note this is possibly the most likely reason we are constantly disappointed because the natural never exactly fits into the unnatural boxes. All that said. Technology has a speed of its own. It just goes whether we go or not. That doesn’t mean a shitload of capitalist business people aren’t attempting to actually make money off of our unnaturally constructed speed world (through productivity), but technological progress really doesn’t give a shit about our constructed desires, it simply is and in its own way reflects its own ‘mechanical-natural’ speed, pace, rhythm and pattern. I imagine my real point in this section is that part of the technology productivity paradox is found in this asynchronistic time/speed relationship between technology speed and people speed.

“What I am against—and without a minute’s hesitation or apology—is our slovenly willingness to allow machines and the idea of the machine to prescribe the terms and conditions of the lives of creatures, which we have allowed increasingly for the last two centuries, and are still allowing, at an incalculable cost to other creatures and to ourselves. If we state the problem that way, then we can see that the way to correct our error, and so deliver ourselves from our own destructiveness, is to quit using our technological capability as the reference point and standard of our economic life. We will instead have to measure our economy by the health of the ecosystems and human communities where we do our work.”

Wendell Berry, Life Is A Miracle: An essay against modern superstition (2000)

Which leads me to the long tail of success.

What I mean by that is a version of people’s inordinate focus on immediate results. In other words, if someone doesn’t see immediate success, they deem it a failure. Headline after headline and ‘expert’ after expert will do everything they can to tear down an investment in the present as a poor investment because it’s not showing immediate returns. Shit. I have no clue how any government can get anything done under this smothering attack mode. This is a problem because there are a boatload of recent studies highlighting that often productivity success is only attained on complimentary technology innovations and not on the foundational innovation, i.e., the long tail of success. Anyway. You can parse out technology into some fairly well defined “useful versus less-than-useful’ contributions to productivity (work and life), but in doing so you ignore the dynamics of the system it is inserting itself into. Technological change does not happen in a vacuum, in fact, technology and society are inextricably bound together. Shit. Productivity does not happen in a vacuum. People shape technology and how technology shapes people and, yet, productivity continues to be measured in inflation, GDP, output, profits and ‘growth.’ Once again, the ‘system’ typically seeks causal relationships and I would be remiss if I didn’t point out that in a dynamic complex system, i.e., the economy, system behavior is a reflection of the whole working together and not any one individual part. So maybe I could argue that technology IS driving productivity because it is a part of the whole that is creating success. Ok. Maybe not; but maybe. Oh. And that long tail thing. I think its absurd to not acknowledge that technology hasn’t made more people, more productive, outside the traditional office construct. We have more profitable healthy small businesses and free-lance/self-employed businesses than ever – all/many fundamentally supported and grounded in technology. Just because a large business cannot prove a productivity increase causation from technology, I don’t think we cannot argue that technology has enhanced productivity. In fact. I would argue technology has been a more effective productivity enhancer with small businesses than big businesses which is most likely an indictment against how larger businesses just cannot get shit done then a technology/productivity paradox.

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 “We find the true person only through group organization. The potentialities of the individual remain potentialities until they are released by group life. Thus, the essence of democracy is creating. The technique of democracy is group organization.”

Marly Parker Follett, The New State

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“We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”

Roy Arama

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Which leads me to say here is where it gets weird and unpredictable.

Two things are converging at the same time:

• Implementation lag. That’s the technical term for “it takes time to master tools.”
• Factory construction. That’s code for “non-human productivity”.

History has shown technology eventually transforms how we live and work, but it can take some time, i.e., implementation lag.

Businesses have to be reorganized and adopt these technologies in an effective way, and other complementary technologies have to be created to exploit the breakthroughs. This can be seen by comparing labour productivity in two different time periods. The one runs from 1870 to 1940, and it is the era of portable power, from its invention, implementation and diffusion. The other one runs from 1970 and onwards and refers to the era of information technology (IT). Labour productivity during the portable power era shared remarkably similar patterns with the IT era. In both eras, there was an initial period of roughly a quarter-century of relatively slow productivity growth. Then both eras saw decade-long accelerations in productivity growth, spanning 1915 to 1924 in the portable power era and 1995 to 2004 more recently.

The second is a bit of a wildcard in that it will drive productivity, just maybe not human productivity (or maybe not structural, just transactional). Simplistically, people discussing the impact of technology seem to like to focus on employment; or unemployment. A bit more complex, or complicated, is how technology gets implemented on a wide scale. Because this requires businesses working out the details across a variety of new plants/manufacturing/offices and the people needed to support this new approach to how the business constrict of doing business is constructed. In other words, productivity increases may be linked to technology; at some point in the future. But. Yeah. Its gonna be weird and unpredictable.

In the end.

Technology is going to grow here and there. Period. Productivity will grow here and there. Period. Technology and productivity will most likely grow together, in some places here and there, and will not in some places here and there. Period. But that isn’t a paradox. Ponder.