Part of the productivity shortfall is a function of measurement error. But that is not enough.
I personally think we can see growth in excess of 2%, if not 4% for long durations. It is not a function of invention. Its a function of resource allocation.
There is a nearly infinite source of latent demand - or unmet needs in society. Things we need to solve. "Data Driven" systems make it easier to detect this latent demand. Innovation is the nexus of customer need and invention. Entrepreneurs see the need and match the invention to the need. To increase GDP we need to improve the coordination of these resources (Latent demand, talent, capital).
Centralize resource allocation fails to grasp the nuances of market signals. As companies get bigger and centralize decision making they lose that signal. They get scale, which has a value, but they lose their ability to detect opportunity.
Dispersed resource allocation, devoid of rent seeking, and close to customers accelerates the matching of markets to technology. Increase data driven systems that eliminate information arbitrage should accelerate productivity.
In the 50s and 60s we saw a great deal of GDP growth in the US, because just about every state in the union had talent (post WWII) and capital (local banks). The US is unique in its zeal for creative destruction. A combination of network driven information discovery and dispersion of decision making should energize a long boom. Creating new products and industries we have yet to imagine.
Part of the productivity shortfall is a function of measurement error. But that is not enough.
I personally think we can see growth in excess of 2%, if not 4% for long durations. It is not a function of invention. Its a function of resource allocation.
There is a nearly infinite source of latent demand - or unmet needs in society. Things we need to solve. "Data Driven" systems make it easier to detect this latent demand. Innovation is the nexus of customer need and invention. Entrepreneurs see the need and match the invention to the need. To increase GDP we need to improve the coordination of these resources (Latent demand, talent, capital).
Centralize resource allocation fails to grasp the nuances of market signals. As companies get bigger and centralize decision making they lose that signal. They get scale, which has a value, but they lose their ability to detect opportunity.
Dispersed resource allocation, devoid of rent seeking, and close to customers accelerates the matching of markets to technology. Increase data driven systems that eliminate information arbitrage should accelerate productivity.
In the 50s and 60s we saw a great deal of GDP growth in the US, because just about every state in the union had talent (post WWII) and capital (local banks). The US is unique in its zeal for creative destruction. A combination of network driven information discovery and dispersion of decision making should energize a long boom. Creating new products and industries we have yet to imagine.