An abiding mystery of the twenty-first-century economy is tepid productivity growth despite the emergence of cutting-edge technologies with the potential to disrupt entire industries. But there could be a simple explanation: the attention these technologies receive is wildly disproportionate to their scale and scope.
MILAN – Statistics can hold brutal truths. We are constantly told that innovation is occurring faster than ever, yet the data coming out of the so-called Fourth Industrial Revolution suggest that it is anything but revolutionary. Among advanced economies, productivity growth is the slowest it’s been in 50 years.
This “productivity paradox” is often attributed to measurement problems or lags following the adoption of disruptive technologies. But another possible explanation is that public debates about technological trends tend to be dominated by the companies and entrepreneurs that are shaping them. The voices of the vast majority of companies that are struggling to keep up with technological change (or actively resisting it) are going unheard.
Acknowledging this underrepresented perspective is essential to understanding why the digital revolution isn’t showing up in the data, and why it may yet stall. Simply put, buzzy talk tends to rely on biased generalizations. For all of their purchase on the public imagination, artificial intelligence (AI), machine learning, Big Data, and humanoid robots fall within the remit of only a handful of firms. The attention these technologies receive is wildly disproportionate to the scale of their development and adoption. As Dan Ariely of Duke University joked back in 2013, “Big data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.”
MILAN – Statistics can hold brutal truths. We are constantly told that innovation is occurring faster than ever, yet the data coming out of the so-called Fourth Industrial Revolution suggest that it is anything but revolutionary. Among advanced economies, productivity growth is the slowest it’s been in 50 years.
This “productivity paradox” is often attributed to measurement problems or lags following the adoption of disruptive technologies. But another possible explanation is that public debates about technological trends tend to be dominated by the companies and entrepreneurs that are shaping them. The voices of the vast majority of companies that are struggling to keep up with technological change (or actively resisting it) are going unheard.
Acknowledging this underrepresented perspective is essential to understanding why the digital revolution isn’t showing up in the data, and why it may yet stall. Simply put, buzzy talk tends to rely on biased generalizations. For all of their purchase on the public imagination, artificial intelligence (AI), machine learning, Big Data, and humanoid robots fall within the remit of only a handful of firms. The attention these technologies receive is wildly disproportionate to the scale of their development and adoption. As Dan Ariely of Duke University joked back in 2013, “Big data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.”