The Big Meh

[Commentary] Everyone knows that we live in an era of incredibly rapid technological change, which is changing everything. But what if what everyone knows is wrong? And I’m not being wildly contrarian here. A growing number of economists, looking at the data on productivity and incomes, are wondering if the technological revolution has been greatly overhyped -- and some technologists share their concern.

We’ve been here before. The era of the “productivity paradox” was a two-decade-long period during which technology seemed to be advancing rapidly -- personal computing, cellphones, local area networks and the early stages of the Internet -- yet economic growth was sluggish and incomes stagnant. Many hypotheses were advanced to explain that paradox, with the most popular probably being that inventing a technology and learning to use it effectively aren’t the same thing. Give it time, said economic historians, and computers will eventually deliver the goods (and services). This optimism seemed vindicated when productivity growth finally took off circa 1995. Progress was back -- and so was America, which seemed to be at the cutting edge of the revolution. But a funny thing happened on the way to the techno-revolution. We did not, it turned out, get a sustained return to rapid economic progress. At this point, the whole digital era, spanning more than four decades, is looking like a disappointment. New technologies have yielded great headlines, but modest economic results. Why?