Analyzing the IT Revolution: Growth Trends and Predictions
Explore the analysis of the Information Technology (IT) Revolution's impact on labor productivity growth through decomposing growth components, predicting future trends, and reassessing potential growth drivers. Historical comparisons and future forecasts provide insights into the ongoing significance of IT advancements in economic productivity.
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Presentation Transcript
Is the Information Technology Revolution Over? By David M. Byrne, Stephen D. Oliner, and Daniel E. Sichel 2013 ASSA Meetings Discussant: Chad Syverson
Overview Paper s analysis has three main parts: 1. Decomposition of LP growth into IT and non-IT components and comparison between 1995-2004 and 2004-2012 2. Prediction of steady state LP growth going forward 3. Re-assessment of potential IT-driven growth in light of evidence from semiconductor manufacturing
1. LP Decomposition: Is a Productivity (Re-) Slowdown Historically Unprecedented? The prior GPT diffusion event was the electrification (& plumbing) era Medium-run LP trends were not altogether different at that time
1. LP Decomposition: Is a Productivity (Re-) Slowdown Historically Unprecedented? No. Labor Productivity, Electrification and IT Eras (1925 = 100 and 1995 = 100) 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 180 160 140 120 Electrification IT 100 80 60 40 1890 1895 1900 1905 1910 1915 1920 1925 1930 1935 1940
1. LP Decomposition: Is a Productivity (Re-) Slowdown Historically Unprecedented? No. Labor Productivity, Electrification and IT Eras (1925 = 100 and 1995 = 100) 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 180 160 140 Electrification 120 Electrification (cont.) 100 IT 80 60 40 1890 1895 1900 1905 1910 1915 1920 1925 1930 1935 1940
1. LP Decomposition: Is a Productivity (Re-) Slowdown Historically Unprecedented? No. Period Annual Avg. LP Growth (%) Period Annual Avg. LP Growth (%) 1896-1915 1.0 1976-1995 1.4 1915-1924 3.3 1995-2004 3.1 1924-1932 1.0 2004-2012 1.6 1932-1940 2.7 2012- ?
2. Predicted Steady-State Future LP Growth Forecasting is hard Average future growth rates are hugely important But recent patterns have convinced me median growth matters a lot too Forget normative issues even positive implications will be inescapable if pattern of past 3 decades continues
2. Predicted Steady-State Future LP Growth Real Labor Productivity Growth vs. Real Median HH Income (1950 = 100) 400 350 300 250 Labor Productivity 200 Median HH Inc 150 100 50 0 1950 1960 1970 1980 1990 2000 2010
3. Intel and Semiconductor Innovation: A More Pessimistic View Authors: semiconductor mfg. technology cycle hasn t slowed Lithography process generation has held at ~2 years since 1993 Intel s CPU cycle has held up similarly However, Pillai (forthcoming): while transistors per unit area have continued to increase, chip designers have not been able to fully harness these improvements NYT, 9/1/09: The computer industry has a secret. Yes, the number of transistors on modern microprocessors continues to multiply geometrically, but no one really knows how to get the most out of all these new transistors.
3. Intel and Semiconductor Innovation: A More Pessimistic View
Wrap-Up Thought-provoking paper: critical issues at hand
