Scanning the productivity horizon

First, productivity improvement transformed the agriculture sector providing millions more people with more and better quality of food and drink at more affordable prices

Then it was manufacturing’s turn, providing more and better clothes and shoes, white goods and cookers, bikes, cars or planes – all making lives easier and getting from A to B quicker

Construction improvements also provided more and better houses, energy and sewerage systems and infrastructure e.g. bridges, roads, railways and airports

As some companies grew, they outsourced many of their operations to smaller specialist outfits who could do specific tasks better and/ or cheaper – thus national economies grew

Private services also developed to provide specialist skills companies and individuals needed, often only on a part-time basis e.g. legal and accountancy support

Increased profits and so national tax-takes generated by these improvements in the private sector have enabled some countries to become welfare states by setting up basic public services, again to improve lives e.g. healthcare and education services for all, national police, fire and armed services, local rubbish collections

So far, so good – but we’re never satisfied with our lot and always want more and better positive things in life and less negatives viz:

  • More information – wider and faster broadband
  • More interesting jobs – less dull, dirty or dangerous work
  • More time at home, with the family and enjoying ourselves – less time at work doing things we’d choose not to do given the option

So what may be next around the corner?

Some say:

  • Working hours will be reduced from the current average of 35 to 15 hours per week by 2030, with zero being a strong possibility by 2050 – the great John Maynard Keynes forecast we would already be working 15 around now
  • Automation, artificial intelligence and robots will do all the work we don’t like to do to produce all the goods and services we both ‘must have’ and would ‘like to have’ – and, at the same time, generate the profits needed to fund a social nirvana where 100% of the population do whatever they want to do that’s legal
  • This will require a UBI – Universal Basic Income – to be paid to everyone so none need to work and all can afford the same goods and services – this idea is not as reckless as it seems although there are many ramifications yet to be fully considered – indeed, it has been shown that if you give money to poor people, even petty criminals and drug addicts, they will use it sensibly, usefully and effectively – they don’t waste their own money, so a UBI is unlikely to be an incentive for idleness, laziness or worse

However, such changes will not happen quickly, if ever, so patience is needed

According to Amara’s Law, named after Roy Amara, a Stanford University computer scientist and head of the Institute for the Future:

“We humans tend to overestimate the impact of a new technology in the short run, but underestimate it in the long run”

Matt Ridley in The Times quotes several technologies where this law has applied:

  • Steam locomotives
  • Electric light bulbs and motors
  • Computers
  • The internet

After some initial excitement about their potential, all these ideas were considered to be ‘nuts’ – yet all eventually became GPTs – widespread, hugely popular and effective General Purpose Technologies

So why does it take so long for such major new ideas to catch on – around 15 years according to Ridley?

Economist Erik Brynjolfson explains: “One needs waves of complementary innovations developed and implemented plus organisational changes plus new skills taught before such GPTs really take hold”

So any major new idea which creates major change will also take major time

Hence, we should not expect the above list of horizon ideas, or anything like them, to have universal effect in the near future

 

 

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