Will productivity growth return in the new digital era?

Speaker : Iraj Saniee
Bell Labs, Nokia, Murray Hill, NJ
Date: 25/10/2017
Time: 2:00 pm - 3:00 pm
Location: LINCS Seminars room


It is increasingly acknowledged that we are on the verge of the next technological and industrial revolution, driven by the digitization and interconnection of physical elements and infrastructure under the control of advanced intelligent systems. Therefore, there will be a new era of automation that should result in enhanced productivity. However, such productivity enhancements have been anticipated before, e.g, the revolution commonly known as the ‘information age’, and have failed to materialize. Were the productivity increases observed following the earlier industrial revolutions a one-time aberration that will not be repeated in the new digital age? In this paper, we attempt to address this question by a quantitative analysis of the prior productivity jumps and their physical technological origins, and extend this analysis to the latent set of analogous digital technologies. This approach leverages a correlation we observe between the diffusion of key infrastructure technologies and productivity jumps. We use data from 1875 to 1985 from the US and data from 1950 to 2015 in China and India to demonstrate this non-linear correlation. Amongst the predictions of the model, we see a possible productivity jump in the United States in the 2030s timeframe when the aggregate of the constituent digital technologies passes the tipping point of 50-60 percent penetration.
Joint work with Marcus Weldon, Sanjay Kamat, Subra Prakash