9 ms·

Computer Saturation and the Productivity Slowdown

104 points by Bostonian 4y ago

Slava_Propanei 4y ago
qsort 4y ago
Fine article from a reputable source, but there's a tendency I despise in modern journalism: making it unclear they're talking about a declining growth rate (positive first derivative, negative second derivative: increasing with the convexity down), not a decline (negative first derivative). But hey, mainstream news sources fail at elementary school math, at least here they're making the effort to fail at high school math.
- llanowarelves 4y ago
  I didn't read the article yet but the headline is pretty tactful here on that point: "Slowdown".
  - deleted 4y ago
    [deleted]
  - throwaway821909 4y ago
    eh, I figured it out, but I think even that only works if the writer and reader have shared assumption that the thing in question inevitably grows and so insert "(rate of increase of)"... "VR slowdown", I'd think less people are buying in, but no-one's throwing their headsets away. "Border crossing slowdown", the number of people crossing the border is actually less than before.
    - reaperducer 4y ago
      that only works if the writer and reader have shared assumption It's the Federal Reserve writing for the sort of people who read studies published by the Federal Reserve. That's a pretty specific audience, and one very likely with a large pool of shared assumptions. This wasn't written for HN randos.
      - 2devnull 4y ago
        I think many hn randos are capable of understanding the piece, but those people will probably not make comments because the thesis here is not exactly non-obvious.
  - deleted 4y ago
    [deleted]
- nostromo 4y ago
  The first sentence of the article makes it very clear they’re speaking of a slowdown in the rate of growth.
  - alpaca128 4y ago
    I disagree, productivity by itself doesn't imply growth. For me "slowdown in productivity" unambiguously means a decline. You also don't write "slowdown of the vehicle speed" when you mean a decrease in acceleration.
  - qsort 4y ago
    Yeah, the article isn't a problem, I'm pretty sure the author is being 100% honest, but the editorialization is. The title of the the first paragraph is "Declining Productivity and Moore’s Law".
  - mihaaly 4y ago
    It still talks about productivity slowdown afterwards, in overall repeatedly, while in fact the productivity increases 1.27% in the worst period analyzed.
  - xdavidliu 4y ago
    No, the article contradicts itself: > Declining Productivity and Moore’s Law > In the U.S., average labor productivity growth in the 1995-2004 period was 2.85 percent per year. This productivity growth significantly declined in the following decade Title of section says "declining productivity"; body says "productivity GROWTH declined". Those are two very different things.
    - avidphantasm 4y ago
      The article also states that once electronics “saturate” an industry (i.e., they are adopted everywhere they can be), their affect on productivity is zero. Not true. Their affect on productivity GROWTH may be zero, but take away the electrics, and productive would decline (according to the assumption of the article that electronics improve productivity). So it seems like the term productivity is jargon for “productivity growth” in this discipline. Still, this seems a bit sloppy and lazy. How hard is it to s/productivity/productivity growth/g? Another problem with the article seems to be that they are assuming causation and simply using a regression to prove it. There is probably a kernel of truth to the story they are telling, but their argument seems to be begging the question.
- bullen 4y ago
  Like acceleration of population growth peaked in 1968. Very relevant if you want to predict the future.
  - tdehnel 4y ago
    Nonsense. The only long term prediction you can make with confidence is that the future will not be like the past.
    - eru 4y ago
      What makes you think so? Status quo bias is pretty strong.
      - deleted 4y ago
        [deleted]
      - 9wzYQbTYsAIc 4y ago
        Plus entropy
      - tdehnel 4y ago
        It always is! Status quo for Newton’s laws was the strongest it ever was in November 1916.
        eru 4y ago
        And Newton's Laws are still great approximations for nearly all circumstances people care about almost all the time. Eg the Apollo programme was flown completely on Newton's Laws.
    - wwweston 4y ago
      Well, that used to be untrue — for a long time, the future was a lot like the past on human lifetime scales. But now we have technical and consequently cultural and even environmental changes that make it likely the future will be unlike the past, so now it is true. But maybe someday that will change and future will be like the past again.
- chatterhead 4y ago
  This isn't a news article it's primary source information as it's from the New York Federal Reserve discussing data-based correlations in economic factors and outcomes. "Once electronics were small enough to be used in almost all industries, their effect on productivity vanished."
  - gtirloni 4y ago
    Which leads the reader to think that removing electronics would keep us at the same level. Poor choice of words.
- meltyness 4y ago
  They could teach a lesson to all the clinical researchers and studies that completely eschew derivatives for exclusively qualitative analyses.
- reaperducer 4y ago
  there's a tendency I despise in modern journalism This is not journalism, and not written by a journalist. It's from the Federal Reserve. It's no more journalism than a court decision published on a web site.
- klabb3 4y ago
  Well spotted! Perhaps macro economists are so used to thinking in terms of growth rate that they forgot to specify it.
techas 4y ago
The proposed model explains slowdown in terms of production technologies and materials, in particular microelectronics. But, is it fair a model that does not take into account the effect of internet during the last 20 years? Not only the hardware have changed the production landscape, but also the networks. The conclusions of the work might be correct, but in my opinion the model seems incomplete to draw conclusions from it.
- geysersam 4y ago
  From what I understood in the end the conclusion was that only a relatively small part of the productivity difference can be explained by electronics minification. And while we can find reasons the productivity increased faster in the 90s, it's not difficult to find reasons why the productivity should increase now as well. Software, network and sensor technology advances rapidly. Biotechnology and medicine too (MRI, better cancer treatments, RNA vaccines, etc). In the same period of time (80s/90s) there were enormous changes of the manufacturing economy in the US. Reforms to the financial system. Outsourcing to Asia etc. So many factors not taken into account. Such science only serves to create compelling stories of the past, it doesn't have predictive value.
leohonexus 4y ago
What about the adoption of cloud, SaaS, and improvements in information systems in industry (e.g. Flexport for freight)? The article doesn’t touch on software at all and instead attributes productivity growth purely as a function of Moore’s Law, which seems counterintuitive as both HW improvements and SWE improve the SW running on top.
- sgt101 4y ago
  But it does provide some interesting ideas about measuring new contributions and identifies them in the combination of electronics and domains of industry.
- jackcosgrove 4y ago
  The article attributes ~12% of productivity growth to electronics miniaturization. It isn't meant to be a comprehensive analysis of the factors of productivity growth. The author is testing a hypothesis about electronics miniaturization and finds it correlated with some of the productivity acceleration during the 80s and 90s. He is using a new dataset and his analysis is shaped by that.
rileyphone 4y ago
Embarrassing that software can be completely elided like this. What gains it has brought have been offset by the stifling of creativity, ossification of process. Maybe there are a few more variables here?
lifeisstillgood 4y ago
So the model is roughly - access to computing devices increased from 1980-2005 which increased productivity - microchips could be added to products, increasing the utility of the product / variability hence productivity. I mean, maybe. Seems reasonable. I suspect that the chase after productivity now has to stop in the physical and be looked for in code and in organisational arrangements - ie we don't need so many managers, but we do need more coders - and how do we get coders to co-ordinate ? mostly through openness, democracy and ... testing :-)
mikewarot 4y ago
We've not tapped the full productivity of computers yet. I'll still be a while before we get capability based security built into everything, then there'll be another boom as creativity is once again released, without the artificial drag of a horrendous security model of ambient authority making everything unsafe.
rrwo 4y ago
I'm wondering if the decline after the mid-2000s isn't due to computers so much as the internet. Once somebody has an internet-connected computer at their desk, they have more distractions (from internal applications like email to external ones like Facebook or reading news online). They also have more kinds of problems that can interrupt their work (server failure, network problems, viruses).
- mvdwoord 4y ago
  They can also use the internet to quickly look up things, ask questions to a giant group of experts, not likely to be available in-company. As well as the countless other productivity boosting resources made available through it.
  - bratbag 4y ago
    They can, but the question is if the two on balance produce a net negative across the population as a whole.
- simmerup 4y ago
  I’m more tempted to think the computers made them more productive and took away the complexity, allowing employers could pay them less. Productivity is just a measure in how much people are paid after all
  - rrwo 4y ago
    I've seen computers improve lives At a former place of work the secretaries became experts at using Excel and even Access or Crystal Reports. I remember one had a beefy SQL book on her desk to make queries directly from the company's Oracle databases. Eventually they got newer titles of "executive assistant" with better pay. The IT department I worked at also lobbied for a policy, so that when computers were upgraded that they should get the newest and more powerful ones, since they were doing the bulk of computing.
- atoav 4y ago
  I think it already makes sense just by looking at computers. A computer ca. 2000 was a machine for productivity mostely. Sure you could play games, look at pictures, videos or similar things, but the whole design of everything in that computer was still very office like (cue pictures of people playing solitaire on windows xp). Look at e.g. Windows 10/11 today. Open the Start menu at a default installation and you will get a much more time wasting User Interface, candy crush: I am looking at you. Windows is no longer the operating system meant for professionals (even if you get the professional version), it is trying to sell you a sweet promise of a lazy joyful time at every corner. Windows has tried to become more like IOS or Android, which are arguably systems designed for consumption more than production. The internet has played it's role in all of this for sure, as it is no longer our bosses wallets they are after, but our attention and time.
mihaaly 4y ago
Slower growth, why is that a problem? That is still a growth. Are we really expecting not only everlasting growth but exponential growth until the end of times?! Come on! Even the 1.27% growth of the groth seems unsustainable, we should be happy about it it not seeking the faults in not achieving somthing unattainable.
- defrost 4y ago
  I'm looking forward to a metric that measures and rewards increasing ability to live better lives within our means ...
  - jlawson 4y ago
    Most measured economic growth is like this - getting more from less.. For example, a process that allows producing 2x more electricity per unit of fuel would increase the productivity of the generator station, and be counted as economic growth. Economic growth also measures increased consumption of natural resources, so it's a mixed measurement admittedly.
    - danny_codes 4y ago
      Except that gdp has no conception of the impact of improved productivity. For example, cars are an incredibly inefficient and expensive transportation model from a capX and operating cost perspective. Switching to a public transit model would increase quality of life, but would shrink the gdp, because the operating costs for public transit are orders of magnitude less than car-oriented transit. So even though public transit would improve efficiency, the 1st order effect would be to reduce gdp.
- millimeterman 4y ago
  Do you think humans have run out of things to invent and improve? Are standards of living good enough that we can be content to stop here? Why exactly should we expect (let alone hope) that growth will stop?
  - 4y ago
bjornsing 4y ago
I think some alternative hypotheses should be considered: 1. Workplace culture has changed drastically over the last 20 years, at least in Sweden. Comparing the work ethic of my parents generation to that of millennials is… like comparing night and day. 2. We’ve been living in a radical monetary policy experiment for the last 20 years, with zero (or even negative) interest rates and quantitative easing. It should also be noted that the previous change in productivity growth rate (in the 80-ties) coincided with a dramatic change in monetary policy.
- sgt101 4y ago
  This would be the radical monetary policy experiment called "avoiding a depression by preventing the financial system from collapsing"?
  - flakeoil 4y ago
    Maybe more like: "We have a bull market and almost no unemployment; let's lower the interest rate to below zero".
    - sgt101 4y ago
      I think that the bull market was definitely created by QE - there were some bloody days on the market in 2008. It was a massive bail out for the financial sector. Did it work - we will see, current signs are not good.
  - deleted 4y ago
    [deleted]
- xiphias2 4y ago
  The monetary quantitative easing is keeping up with technological productivity improvements: central banks inflate currencies as much as they can get away with without getting a revolution from the working people.
  - bjornsing 4y ago
kkfx 4y ago
IMVHO it's not a matter of "we can integrate more creating a scaling effect" or "we have done too much, too intricacy" it's a matter of "basic technology" designed for business purposes instead of whole society serving purpose. Try a modern car: it's a crapload of crapware crap. It's not because we have tried to integrate too much, automotive sector do not know IT, ... it's because modern cars are NOT designed for the human, formal owner, but as a service, a way to (ab)use the human owner to milk extra money. Similar thing happen with the cloud+mobile integration. The SOLE way IT works is an open ecosystem where ANYONE can see, change at any level, contribute and discuss, because IT it's not a layer of automation over something else (typically a mechanical/electrical thing) but a logic layer between humans and their own machines. Productivity fall because user freedom an power falls. Users now are just a mechanical arm of a crapware system to do the part the crapware system can't do alone. The systems is designed to milk money on them, not to serve them. If big of IT want real productivity MUST look back at their history: the more they abuse users the more short-term profits they elicit, than a fall. Or they came back to a FREE software, open hardware where they compete in features not in lock-in and crappy UIs/tools or they will be pushed aside as a generic commodity sooner or later eroded by some other sector who made more money them them (energy sector seems a candidate so far).
xnx 4y ago
Properly applied AL/ML systems will keep productivity alive. Think stable diffusion for everything.
funstuff007 4y ago
I thought they were talking about the lost working time whenever my machine locks up because a job I'm running uses up all my cores/memory, or I have too many browser tabs open.
graycat 4y ago
The article has "A car from the 2020s with thousands of microchips ..." "Thousands"? Uh, I confess: That's where I stopped reading!
- ghaff 4y ago
  This trade pub says around 1,000 is the number: https://electronics-sourcing.com/2022/05/04/how-many-chips-are-in-our-cars/ https://electronics-sourcing.com/2022/05/04/how-many-chips-a... This article says 1200. https://www.freep.com/story/money/cars/mark-phelan/2022/02/19/how-chip-crisis-happened-and-what-automakers-doing/6822787001/ https://www.freep.com/story/money/cars/mark-phelan/2022/02/1... So no. "Thousands" doesn't seem out of the ballpark.
  - graycat 4y ago
    WOW. Good grief. The article https://electronics-sourcing.com/2022/05/04/how-many-chips-are-in-our-cars/ https://electronics-sourcing.com/2022/05/04/how-many-chips-a... has: "By 2020, electronics now comprise 40% of the car’s cost," WOW. Looks like a golden opportunity of a really fast, easy way to save nearly 40% of the cost of a car!
    - nradov 4y ago
      Please explain how it would be "easy" to save 40% of those costs. The chips are doing things that are legally required or that customers demand, like controlling the ABS or streaming Bluetooth audio. Sure it's theoretically possible to build a cheap car with minimal electronics but it wouldn't be legal to sell, and few customers would even want it. (Yes I am aware there are some people who want a simple car. They aren't a large enough market segment for any manufacturer to care about.)
      - graycat 4y ago
        I'm all for computer controlled engine fuel and ignition, but otherwise I don't want computers in my car. I was happy with my 1987 Chevy S-10 Blazer until the oil pan rusted out due to winter road salt. Then I upgraded to a 2001 GMC Yukon. The Yukon has some automatic stuff, and I hate it. If the newer cars have more automatic stuff, then I will hate that, too. I don't believe you are correct that the laws and regulations require automation that needs for computers in cars. E.g., as I recall, we had anti-lock brakes long before we had computer chips in cars. I used to be a car guy so understand quite a lot about cars and how they work. E.g., need computer chips to monitor the transmission? We've had transmissions for 100 years and quite good automatic transmissions since the 1950s all without computer monitoring. For the drivers wanting Bluetooth, ..., an entertainment center, a communications center, a lot of self-driving, a touch screen, I doubt it. Use computers to help with door locks? To me that is directly from wack-o land. For what the computers do, I don't want it. For their buzzers and flashing lights, I wish they'd just go away. I don't want to pay for the chips when I buy the car, put up with the false alarms, or pay for repairs. E.g., my Yukon has a little light on the instrument panel that says something about "BRAKE". Well, it's a tiny, obscure thing, so I looked at the PDF of the owner's manual I downloaded and got the details. It's a light about the parking brake. The parking brake is NOT on, and the light is a false alarm. I wish the light would stop, quit, turn off, go away, disappear, be gone. A false alarm for the parking brake and then reading up in the PDF -- WASTE of time. Busy work. Deliberate extra complexity. To me, most of that computerization looks like a crowd pushing/following a fad, a fad that will go away in a few years. It's like the low flow plumbing: Maybe, I doubt it, but maybe in a desert there is a reason. Otherwise it is a waste of my time -- takes longer to fill a pot with water. I don't live in a desert. We have plenty of water. Low flow is the result of people making work for themselves and hurting my life. But, the talking about saving water has died down and maybe the same for low flow plumbing. Hopefully any low flow is implemented with just a little restrictor that can be removed, drilled out, or otherwise disabled. I suspect that the cars are designed so that no matter what happens to the computerization, the car will still function -- the doors will still open and close, the door locks will still work, etc. That is, the designers knew that the computerization is glitz, nonsense, that can't be permitted to be essential to the car. The US has a compulsion, can't quit, "change the cars!!!!". Can't leave good enough alone. Bunch of people making jobs for themselves, jobs that don't need doing -- jobs doing things for helpless me I very much do not want done. And, whatever else, that 40% is a big waste of money, and the US has more than enough pressures on family budgets to waste money. Big Point: US is failing at family formation and having kids. The birth rate is so low that we are going extinct, literally, rapidly. IMHO, the main reason is that US families are short on money for having kids. The two big expenditures are a house and two cars. If we could save the 40% on each of the cars, then, net, the US would have more kids. But I might be wrong, in small ways or big ones. This whole thing is part of a big pet peeve of mine: I want to keep things simple and spend my time, energy, and money working on my startup or whatever, certainly not mud wrestling with maintenance of absurd nonsense on a car. E.g., several times a day my Firefox browser reminds me that there is a newer version I can download. I HATE that. I do NOT want a newer version. Where can I even pay money to STOP the notifications of updates? A newer version will make changes, there are no changes I want, the changes may make some things worse, and there is nearly no chance the changes will make any improvements. The version of Firefox I use has something it calls "pockets". I don't know what they are, and I don't want to devote the time or energy looking into what they are. The Internet, TCP/IP, the Web, URLs, HTTP, HTML, CSS, Ethernet, WiFi, etc. are all very nice and simple. I just want to use them, not futz with more that is worthless. I needed a laptop, got one, and it had Windows 10. I HATE Windows 10. My development computer is Windows 7 Professional, and THAT is what I like and want. From all I've heard about Windows 11, I will hate it even more. I just want an operating system to do the basic things, let me run my programs and write more programs. It goes on this way -- people trying to make a living by making stupid changes and then forcing them on me.
jrm4 4y ago
I wish it were more obvious the extent to which this is all astrology.
danabrams 4y ago
How feasible is this alternative theory: the growth of computing systems, while increasing productivity, has also allowed a substantial growth in bureaucracy.
- Archelaos 4y ago
  Two thoughts: a) How can we measure "bureaucracy"? b) On average, an increase in bureaucracy implies an increase in productivy.
  - MrWiffles 4y ago
    I’d think b is exactly the opposite. More b is less productivity from my experience, 100% of the time.
  - danabrams 4y ago
    For a) you can at least measure the ratio of managerial to non-managerial staff (which has become more substantially more heavily weighted towards management since 1983).
  - danabrams 4y ago
    For B) Parkinson’s law predicts that useless bureaucracy, if left unchecked, will eat any gains in productivity.
black_13 4y ago
RosanaAnaDana 4y ago
Eventually we'll see a similar pattern with AI. Some industry where it makes sense will incorporate it and see the gains. Slowly and maybe after a couple oom improvemens, every other industry will come along.
dheera 4y ago
> Productivity Slowdown Blame FB, HN, Reddit, Instagram, Twitter? I feel like this is pretty glaringly obvious.
tuatoru 4y ago
The article's model is wrong-headed in two ways. First, it is based on manufacturing, which has been a minority of economic activity throughout the period it discusses. To explain anything, it needs to explain services. Second, the model is too elaborate and depends on a hard-to-measure variable (saturation). Let's use a really simple model in which work (service work) is made up of two tasks, decision-making and communication. Recall that 1995-2004 is the exact period when cell phones and email diffused throughout the economy. These improved the rate at which communication tasks could be completed, so productivity grew in this task. But as with everything there are diminishing returns to further improvement. The other task, decision-making, is much more varied, being different for truck drivers, real estate agents, nurses, and yoga instructors (to select a few examples). Increasing productivity in the decision-making task across the whole economy is much harder, which is why productivity growth has slowed down.
19h 4y ago
Off topic: It’s really hard to read on a mobile device. I’d really wish blog posts would look more like the iOS reader mode: https://i.imgur.com/K9nDmpN.png https://i.imgur.com/K9nDmpN.png

104 points by Bostonian 4y ago

Fine article from a reputable source, but there's a tendency I despise in modern journalism: making it unclear they're talking about a declining growth rate (positive first derivative, negative second derivative: increasing with the convexity down), not a decline (negative first derivative). But hey, mainstream news sources fail at elementary school math, at least here they're making the effort to fail at high school math.

llanowarelves 4y ago
I didn't read the article yet but the headline is pretty tactful here on that point: "Slowdown".
- deleted 4y ago
  [deleted]
- throwaway821909 4y ago
  eh, I figured it out, but I think even that only works if the writer and reader have shared assumption that the thing in question inevitably grows and so insert "(rate of increase of)"... "VR slowdown", I'd think less people are buying in, but no-one's throwing their headsets away. "Border crossing slowdown", the number of people crossing the border is actually less than before.
  - reaperducer 4y ago
    that only works if the writer and reader have shared assumption It's the Federal Reserve writing for the sort of people who read studies published by the Federal Reserve. That's a pretty specific audience, and one very likely with a large pool of shared assumptions. This wasn't written for HN randos.
    - 2devnull 4y ago
      I think many hn randos are capable of understanding the piece, but those people will probably not make comments because the thesis here is not exactly non-obvious.
- deleted 4y ago
  [deleted]
nostromo 4y ago
The first sentence of the article makes it very clear they’re speaking of a slowdown in the rate of growth.
- alpaca128 4y ago
  I disagree, productivity by itself doesn't imply growth. For me "slowdown in productivity" unambiguously means a decline. You also don't write "slowdown of the vehicle speed" when you mean a decrease in acceleration.
- qsort 4y ago
  Yeah, the article isn't a problem, I'm pretty sure the author is being 100% honest, but the editorialization is. The title of the the first paragraph is "Declining Productivity and Moore’s Law".
- mihaaly 4y ago
  It still talks about productivity slowdown afterwards, in overall repeatedly, while in fact the productivity increases 1.27% in the worst period analyzed.
- xdavidliu 4y ago
  No, the article contradicts itself: > Declining Productivity and Moore’s Law > In the U.S., average labor productivity growth in the 1995-2004 period was 2.85 percent per year. This productivity growth significantly declined in the following decade Title of section says "declining productivity"; body says "productivity GROWTH declined". Those are two very different things.
  - avidphantasm 4y ago
    The article also states that once electronics “saturate” an industry (i.e., they are adopted everywhere they can be), their affect on productivity is zero. Not true. Their affect on productivity GROWTH may be zero, but take away the electrics, and productive would decline (according to the assumption of the article that electronics improve productivity). So it seems like the term productivity is jargon for “productivity growth” in this discipline. Still, this seems a bit sloppy and lazy. How hard is it to s/productivity/productivity growth/g? Another problem with the article seems to be that they are assuming causation and simply using a regression to prove it. There is probably a kernel of truth to the story they are telling, but their argument seems to be begging the question.
bullen 4y ago
Like acceleration of population growth peaked in 1968. Very relevant if you want to predict the future.
- tdehnel 4y ago
  Nonsense. The only long term prediction you can make with confidence is that the future will not be like the past.
  - eru 4y ago
    What makes you think so? Status quo bias is pretty strong.
    - deleted 4y ago
      [deleted]
    - 9wzYQbTYsAIc 4y ago
      Plus entropy
    - tdehnel 4y ago
      It always is! Status quo for Newton’s laws was the strongest it ever was in November 1916.
      - eru 4y ago
        And Newton's Laws are still great approximations for nearly all circumstances people care about almost all the time. Eg the Apollo programme was flown completely on Newton's Laws.
  - wwweston 4y ago
    Well, that used to be untrue — for a long time, the future was a lot like the past on human lifetime scales. But now we have technical and consequently cultural and even environmental changes that make it likely the future will be unlike the past, so now it is true. But maybe someday that will change and future will be like the past again.
chatterhead 4y ago
This isn't a news article it's primary source information as it's from the New York Federal Reserve discussing data-based correlations in economic factors and outcomes. "Once electronics were small enough to be used in almost all industries, their effect on productivity vanished."
- gtirloni 4y ago
  Which leads the reader to think that removing electronics would keep us at the same level. Poor choice of words.
meltyness 4y ago
They could teach a lesson to all the clinical researchers and studies that completely eschew derivatives for exclusively qualitative analyses.
reaperducer 4y ago
there's a tendency I despise in modern journalism This is not journalism, and not written by a journalist. It's from the Federal Reserve. It's no more journalism than a court decision published on a web site.
klabb3 4y ago
Well spotted! Perhaps macro economists are so used to thinking in terms of growth rate that they forgot to specify it.

techas 4y ago

The proposed model explains slowdown in terms of production technologies and materials, in particular microelectronics. But, is it fair a model that does not take into account the effect of internet during the last 20 years? Not only the hardware have changed the production landscape, but also the networks. The conclusions of the work might be correct, but in my opinion the model seems incomplete to draw conclusions from it.

geysersam 4y ago
From what I understood in the end the conclusion was that only a relatively small part of the productivity difference can be explained by electronics minification. And while we can find reasons the productivity increased faster in the 90s, it's not difficult to find reasons why the productivity should increase now as well. Software, network and sensor technology advances rapidly. Biotechnology and medicine too (MRI, better cancer treatments, RNA vaccines, etc). In the same period of time (80s/90s) there were enormous changes of the manufacturing economy in the US. Reforms to the financial system. Outsourcing to Asia etc. So many factors not taken into account. Such science only serves to create compelling stories of the past, it doesn't have predictive value.

leohonexus 4y ago

What about the adoption of cloud, SaaS, and improvements in information systems in industry (e.g. Flexport for freight)? The article doesn’t touch on software at all and instead attributes productivity growth purely as a function of Moore’s Law, which seems counterintuitive as both HW improvements and SWE improve the SW running on top.

sgt101 4y ago
But it does provide some interesting ideas about measuring new contributions and identifies them in the combination of electronics and domains of industry.
jackcosgrove 4y ago
The article attributes ~12% of productivity growth to electronics miniaturization. It isn't meant to be a comprehensive analysis of the factors of productivity growth. The author is testing a hypothesis about electronics miniaturization and finds it correlated with some of the productivity acceleration during the 80s and 90s. He is using a new dataset and his analysis is shaped by that.

rileyphone 4y ago

Embarrassing that software can be completely elided like this. What gains it has brought have been offset by the stifling of creativity, ossification of process. Maybe there are a few more variables here?

lifeisstillgood 4y ago

So the model is roughly - access to computing devices increased from 1980-2005 which increased productivity - microchips could be added to products, increasing the utility of the product / variability hence productivity. I mean, maybe. Seems reasonable. I suspect that the chase after productivity now has to stop in the physical and be looked for in code and in organisational arrangements - ie we don't need so many managers, but we do need more coders - and how do we get coders to co-ordinate ? mostly through openness, democracy and ... testing :-)

mikewarot 4y ago

We've not tapped the full productivity of computers yet. I'll still be a while before we get capability based security built into everything, then there'll be another boom as creativity is once again released, without the artificial drag of a horrendous security model of ambient authority making everything unsafe.

rrwo 4y ago

I'm wondering if the decline after the mid-2000s isn't due to computers so much as the internet. Once somebody has an internet-connected computer at their desk, they have more distractions (from internal applications like email to external ones like Facebook or reading news online). They also have more kinds of problems that can interrupt their work (server failure, network problems, viruses).

mvdwoord 4y ago
They can also use the internet to quickly look up things, ask questions to a giant group of experts, not likely to be available in-company. As well as the countless other productivity boosting resources made available through it.
- bratbag 4y ago
  They can, but the question is if the two on balance produce a net negative across the population as a whole.
simmerup 4y ago
I’m more tempted to think the computers made them more productive and took away the complexity, allowing employers could pay them less. Productivity is just a measure in how much people are paid after all
- rrwo 4y ago
  I've seen computers improve lives At a former place of work the secretaries became experts at using Excel and even Access or Crystal Reports. I remember one had a beefy SQL book on her desk to make queries directly from the company's Oracle databases. Eventually they got newer titles of "executive assistant" with better pay. The IT department I worked at also lobbied for a policy, so that when computers were upgraded that they should get the newest and more powerful ones, since they were doing the bulk of computing.
atoav 4y ago
I think it already makes sense just by looking at computers. A computer ca. 2000 was a machine for productivity mostely. Sure you could play games, look at pictures, videos or similar things, but the whole design of everything in that computer was still very office like (cue pictures of people playing solitaire on windows xp). Look at e.g. Windows 10/11 today. Open the Start menu at a default installation and you will get a much more time wasting User Interface, candy crush: I am looking at you. Windows is no longer the operating system meant for professionals (even if you get the professional version), it is trying to sell you a sweet promise of a lazy joyful time at every corner. Windows has tried to become more like IOS or Android, which are arguably systems designed for consumption more than production. The internet has played it's role in all of this for sure, as it is no longer our bosses wallets they are after, but our attention and time.

mihaaly 4y ago

Slower growth, why is that a problem? That is still a growth. Are we really expecting not only everlasting growth but exponential growth until the end of times?! Come on! Even the 1.27% growth of the groth seems unsustainable, we should be happy about it it not seeking the faults in not achieving somthing unattainable.

defrost 4y ago
I'm looking forward to a metric that measures and rewards increasing ability to live better lives within our means ...
- jlawson 4y ago
  Most measured economic growth is like this - getting more from less.. For example, a process that allows producing 2x more electricity per unit of fuel would increase the productivity of the generator station, and be counted as economic growth. Economic growth also measures increased consumption of natural resources, so it's a mixed measurement admittedly.
  - danny_codes 4y ago
    Except that gdp has no conception of the impact of improved productivity. For example, cars are an incredibly inefficient and expensive transportation model from a capX and operating cost perspective. Switching to a public transit model would increase quality of life, but would shrink the gdp, because the operating costs for public transit are orders of magnitude less than car-oriented transit. So even though public transit would improve efficiency, the 1st order effect would be to reduce gdp.
millimeterman 4y ago
Do you think humans have run out of things to invent and improve? Are standards of living good enough that we can be content to stop here? Why exactly should we expect (let alone hope) that growth will stop?
- 4y ago

bjornsing 4y ago

I think some alternative hypotheses should be considered: 1. Workplace culture has changed drastically over the last 20 years, at least in Sweden. Comparing the work ethic of my parents generation to that of millennials is… like comparing night and day. 2. We’ve been living in a radical monetary policy experiment for the last 20 years, with zero (or even negative) interest rates and quantitative easing. It should also be noted that the previous change in productivity growth rate (in the 80-ties) coincided with a dramatic change in monetary policy.

sgt101 4y ago
This would be the radical monetary policy experiment called "avoiding a depression by preventing the financial system from collapsing"?
- flakeoil 4y ago
  Maybe more like: "We have a bull market and almost no unemployment; let's lower the interest rate to below zero".
  - sgt101 4y ago
    I think that the bull market was definitely created by QE - there were some bloody days on the market in 2008. It was a massive bail out for the financial sector. Did it work - we will see, current signs are not good.
- deleted 4y ago
  [deleted]
xiphias2 4y ago
The monetary quantitative easing is keeping up with technological productivity improvements: central banks inflate currencies as much as they can get away with without getting a revolution from the working people.
- bjornsing 4y ago

kkfx 4y ago

IMVHO it's not a matter of "we can integrate more creating a scaling effect" or "we have done too much, too intricacy" it's a matter of "basic technology" designed for business purposes instead of whole society serving purpose. Try a modern car: it's a crapload of crapware crap. It's not because we have tried to integrate too much, automotive sector do not know IT, ... it's because modern cars are NOT designed for the human, formal owner, but as a service, a way to (ab)use the human owner to milk extra money. Similar thing happen with the cloud+mobile integration. The SOLE way IT works is an open ecosystem where ANYONE can see, change at any level, contribute and discuss, because IT it's not a layer of automation over something else (typically a mechanical/electrical thing) but a logic layer between humans and their own machines. Productivity fall because user freedom an power falls. Users now are just a mechanical arm of a crapware system to do the part the crapware system can't do alone. The systems is designed to milk money on them, not to serve them. If big of IT want real productivity MUST look back at their history: the more they abuse users the more short-term profits they elicit, than a fall. Or they came back to a FREE software, open hardware where they compete in features not in lock-in and crappy UIs/tools or they will be pushed aside as a generic commodity sooner or later eroded by some other sector who made more money them them (energy sector seems a candidate so far).

xnx 4y ago

Properly applied AL/ML systems will keep productivity alive. Think stable diffusion for everything.

funstuff007 4y ago

I thought they were talking about the lost working time whenever my machine locks up because a job I'm running uses up all my cores/memory, or I have too many browser tabs open.

graycat 4y ago

The article has "A car from the 2020s with thousands of microchips ..." "Thousands"? Uh, I confess: That's where I stopped reading!

ghaff 4y ago
This trade pub says around 1,000 is the number: https://electronics-sourcing.com/2022/05/04/how-many-chips-are-in-our-cars/ https://electronics-sourcing.com/2022/05/04/how-many-chips-a... This article says 1200. https://www.freep.com/story/money/cars/mark-phelan/2022/02/19/how-chip-crisis-happened-and-what-automakers-doing/6822787001/ https://www.freep.com/story/money/cars/mark-phelan/2022/02/1... So no. "Thousands" doesn't seem out of the ballpark.
- graycat 4y ago
  WOW. Good grief. The article https://electronics-sourcing.com/2022/05/04/how-many-chips-are-in-our-cars/ https://electronics-sourcing.com/2022/05/04/how-many-chips-a... has: "By 2020, electronics now comprise 40% of the car’s cost," WOW. Looks like a golden opportunity of a really fast, easy way to save nearly 40% of the cost of a car!
  - nradov 4y ago
    Please explain how it would be "easy" to save 40% of those costs. The chips are doing things that are legally required or that customers demand, like controlling the ABS or streaming Bluetooth audio. Sure it's theoretically possible to build a cheap car with minimal electronics but it wouldn't be legal to sell, and few customers would even want it. (Yes I am aware there are some people who want a simple car. They aren't a large enough market segment for any manufacturer to care about.)
    - graycat 4y ago
      I'm all for computer controlled engine fuel and ignition, but otherwise I don't want computers in my car. I was happy with my 1987 Chevy S-10 Blazer until the oil pan rusted out due to winter road salt. Then I upgraded to a 2001 GMC Yukon. The Yukon has some automatic stuff, and I hate it. If the newer cars have more automatic stuff, then I will hate that, too. I don't believe you are correct that the laws and regulations require automation that needs for computers in cars. E.g., as I recall, we had anti-lock brakes long before we had computer chips in cars. I used to be a car guy so understand quite a lot about cars and how they work. E.g., need computer chips to monitor the transmission? We've had transmissions for 100 years and quite good automatic transmissions since the 1950s all without computer monitoring. For the drivers wanting Bluetooth, ..., an entertainment center, a communications center, a lot of self-driving, a touch screen, I doubt it. Use computers to help with door locks? To me that is directly from wack-o land. For what the computers do, I don't want it. For their buzzers and flashing lights, I wish they'd just go away. I don't want to pay for the chips when I buy the car, put up with the false alarms, or pay for repairs. E.g., my Yukon has a little light on the instrument panel that says something about "BRAKE". Well, it's a tiny, obscure thing, so I looked at the PDF of the owner's manual I downloaded and got the details. It's a light about the parking brake. The parking brake is NOT on, and the light is a false alarm. I wish the light would stop, quit, turn off, go away, disappear, be gone. A false alarm for the parking brake and then reading up in the PDF -- WASTE of time. Busy work. Deliberate extra complexity. To me, most of that computerization looks like a crowd pushing/following a fad, a fad that will go away in a few years. It's like the low flow plumbing: Maybe, I doubt it, but maybe in a desert there is a reason. Otherwise it is a waste of my time -- takes longer to fill a pot with water. I don't live in a desert. We have plenty of water. Low flow is the result of people making work for themselves and hurting my life. But, the talking about saving water has died down and maybe the same for low flow plumbing. Hopefully any low flow is implemented with just a little restrictor that can be removed, drilled out, or otherwise disabled. I suspect that the cars are designed so that no matter what happens to the computerization, the car will still function -- the doors will still open and close, the door locks will still work, etc. That is, the designers knew that the computerization is glitz, nonsense, that can't be permitted to be essential to the car. The US has a compulsion, can't quit, "change the cars!!!!". Can't leave good enough alone. Bunch of people making jobs for themselves, jobs that don't need doing -- jobs doing things for helpless me I very much do not want done. And, whatever else, that 40% is a big waste of money, and the US has more than enough pressures on family budgets to waste money. Big Point: US is failing at family formation and having kids. The birth rate is so low that we are going extinct, literally, rapidly. IMHO, the main reason is that US families are short on money for having kids. The two big expenditures are a house and two cars. If we could save the 40% on each of the cars, then, net, the US would have more kids. But I might be wrong, in small ways or big ones. This whole thing is part of a big pet peeve of mine: I want to keep things simple and spend my time, energy, and money working on my startup or whatever, certainly not mud wrestling with maintenance of absurd nonsense on a car. E.g., several times a day my Firefox browser reminds me that there is a newer version I can download. I HATE that. I do NOT want a newer version. Where can I even pay money to STOP the notifications of updates? A newer version will make changes, there are no changes I want, the changes may make some things worse, and there is nearly no chance the changes will make any improvements. The version of Firefox I use has something it calls "pockets". I don't know what they are, and I don't want to devote the time or energy looking into what they are. The Internet, TCP/IP, the Web, URLs, HTTP, HTML, CSS, Ethernet, WiFi, etc. are all very nice and simple. I just want to use them, not futz with more that is worthless. I needed a laptop, got one, and it had Windows 10. I HATE Windows 10. My development computer is Windows 7 Professional, and THAT is what I like and want. From all I've heard about Windows 11, I will hate it even more. I just want an operating system to do the basic things, let me run my programs and write more programs. It goes on this way -- people trying to make a living by making stupid changes and then forcing them on me.

jrm4 4y ago

I wish it were more obvious the extent to which this is all astrology.

danabrams 4y ago

How feasible is this alternative theory: the growth of computing systems, while increasing productivity, has also allowed a substantial growth in bureaucracy.

Archelaos 4y ago
Two thoughts: a) How can we measure "bureaucracy"? b) On average, an increase in bureaucracy implies an increase in productivy.
- MrWiffles 4y ago
  I’d think b is exactly the opposite. More b is less productivity from my experience, 100% of the time.
- danabrams 4y ago
  For a) you can at least measure the ratio of managerial to non-managerial staff (which has become more substantially more heavily weighted towards management since 1983).
- danabrams 4y ago
  For B) Parkinson’s law predicts that useless bureaucracy, if left unchecked, will eat any gains in productivity.

black_13 4y ago

RosanaAnaDana 4y ago

Eventually we'll see a similar pattern with AI. Some industry where it makes sense will incorporate it and see the gains. Slowly and maybe after a couple oom improvemens, every other industry will come along.

dheera 4y ago

> Productivity Slowdown Blame FB, HN, Reddit, Instagram, Twitter? I feel like this is pretty glaringly obvious.

tuatoru 4y ago

The article's model is wrong-headed in two ways. First, it is based on manufacturing, which has been a minority of economic activity throughout the period it discusses. To explain anything, it needs to explain services. Second, the model is too elaborate and depends on a hard-to-measure variable (saturation). Let's use a really simple model in which work (service work) is made up of two tasks, decision-making and communication. Recall that 1995-2004 is the exact period when cell phones and email diffused throughout the economy. These improved the rate at which communication tasks could be completed, so productivity grew in this task. But as with everything there are diminishing returns to further improvement. The other task, decision-making, is much more varied, being different for truck drivers, real estate agents, nurses, and yoga instructors (to select a few examples). Increasing productivity in the decision-making task across the whole economy is much harder, which is why productivity growth has slowed down.

19h 4y ago

Off topic: It’s really hard to read on a mobile device. I’d really wish blog posts would look more like the iOS reader mode: https://i.imgur.com/K9nDmpN.png https://i.imgur.com/K9nDmpN.png