Technology People and Productivity - Productivity In A Nutshell, The Steady Rise Of Productivity, Domestic Output And The Role Of Technology

In the following six panels, we present information on productivity.

The conventional view of productivity is that personal income rises with productivity. And productivity rises because technology enables us to do more in less time. With better tools we can do more. And the more we automate — and let machines do all the work — the wealthier we become.

Productivity has had a remarkable growth over the last 50 years or so. The findings developed here clearly show the impact of technology, including a "revival" in productivity growth in the recent Internet Age. But the situation shows considerable complexity. Productivity is a "social phenomenon" in which a number of factors play decisive roles. Technology is one. Public confidence, global events (wars), and the general management of the economy also play roles.

It takes fewer people to produce a measure of output — but the performance is not uniform across the sectors. People are clearly being displaced — but the economy, especially the services sector — absorbs the labor freed up by improvements in productivity.

The presentation begins with a brief tutorial that also serves to show the linkage between productivity and compensation. Next we look at a longer history of productivity and chart its phases; growth declines and then revives. In the third panel, we take a closer look at technology, including computers and software. A 1997 snapshot of the private sector follows; it shows that different industrial sectors have different levels of productivity. Next we compare manufacturing and construction in some detail over a longer period of time. Finally, a sophisticated system of measurement, Multifactor Productivity, is unveiled to show the effect of hidden, "synergistic" factors in the economy.