High-tech Technology Slowing Productivity A Scam?

 High-tech Technology Slowing Productivity Is So Bad, Why Don't Statistics Show It?

Immersed in the process of rapid high technological change in the world economy, productivity growth has slowed, which represents a conflict. While the economy has improved with the advent of technology, income inequality has worsened. Is there a connection between high technology, productivity, and distribution that explains these trends? Of course, there are common causes of low productivity growth and inequality, among which high technology changes and their interaction with market and policy failures play a relevant transversal role. Many technologies will need to be developed to respond to the profound changes that digital technologies are reshaping the market and labor.

Evidence of technological change, led by advances in high technology, is everywhere. Just look at the increasingly sophisticated mobile phones and computer systems, the digital platforms that are transforming the growing use of information, communication, robotics, and artificial intelligence. High technology is a key driver of increased productivity, helping people reach the highest levels of efficiency. How has the growth of the economy slowed down in the last few decades with the development of high technology? So we will try to find out.

In most countries, income inequality is on the rise in major economies. Could these trends in productivity and inequality, which have been identified especially in developed economies, be interrelated?

Slow productivity and growing income inequality have become the two main concerns of our time. Their integration leads to weak and less inclusive economic growth, slow and uneven improvement in living standards, and contributes to social problems and divisions. Both are tied to the forces that have emerged in recent times following the rise of political populism in many large economies. How should policies respond to revitalize productivity and encourage more inclusive growth patterns?

This article aims to address these questions through an analysis of recent and ongoing research. These issues are relevant and of great interest. Surprisingly, they have given rise to much analytical research and policy debate. The purpose of this lesson will be to provide an overview of key issues and outcomes and how they are rebuilding the political agenda.

What do the statistics indicate?

 The power to increase overall productivity has waned in the major economies of most countries.

The long-term trend of low productivity growth is evident since the 1980s. Some economies saw a reversal in productivity growth in the 1990s and early 2000s, especially the United States, which apparently reflects the high-tech technological innovations that the United States has adopted, but the reversal has been short-lived and productivity growth has slowed down again. Because the global financial crisis has exacerbated the slowdown in productivity. Thus there is a cyclical element of post-crisis slowdown in increasing productivity. However, this was before the recession crisis.

 Persistent erosive trends suggest that deep-present structural factors may slow down the underlying pace of productivity growth. Increased productivity shows a similar trend across developed economies as a whole, and more recently, in most major emerging economies. Only a cyclical component of post-crisis slowdown in productivity growth. However, this was before the recession crisis.

Analysis of productivity dynamics at a strong level provides more relevant data. Productivity growth has slowed without leading high companies. However, it has slowed down in the rest of the generally small companies, slowing down overall productivity growth.

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 Looking at this pattern, it is not the problem of the technology itself, but its lack of penetration. This has little to do with the fact that techno-pessimists fear that innovation is weakening, but rather that some barriers hinder the greater expansion of innovation within the company and limit productivity growth; A search consistent with the views of techno-adaptationists. Explains the growing gaps in productivity behavior between companies, in part, the conflict between advanced technology and the slowdown in overall productivity growth.

One credible view of this conflict is that it may be illusory. According to this approach, productivity is undervalued because statistics fail to fully capture the benefits from new high technology in delivering products and services that add quality, product diversity, and value to consumers, but which they do not have. A market value (such as Google search). Research shows that the advantages of new technologies have not been properly evaluated, but these measurement errors may explain a small part of the slowdown in economic benefits. In most cases, productivity slows down and the paradox is real.

Combining productivity decline and growing inequality In the United States, labor productivity growth averaged less than 50 percent on average in the second half of the 1990s, from 2005-to 2015. During that same period, income inequality, as measured by the most common inequality measure (Guinea index), increased by more than 10 percent. The share of income in the top 1 percent has more than doubled since the early 1980s to about 22 percent, with most of the growth occurring in the mid-1990s.

In sum, the productivity slump seems to reflect the growing disparity between the leading companies and the rest.

Are these tendencies connected by mere coincidences, parallels, or common causes? Slow productivity and growing inequality have come under intense scrutiny by economists. Most analysts have looked at them in isolation, but more recently analysts have explored potential links between these trends. This study concludes that slow productivity growth and increasing inequality are interconnected and important common causes (OECD, 2017a; Qureshi, 2017).

Technology-Production-Distribution Nexus

The combination of technological change and market conditions, to the extent that they are influenced by policy, has been a key cross-cutting factor, influencing the evolution of productivity and income inequality; Technology, productivity, and distribution are connected by a common bond.

In sum, the productivity slump seems to reflect the growing disparity between the leading companies and the rest. The benefits of the new technology have been cut for the most part by a small number of large companies. Overall productivity growth slows in sectors with higher productivity deviations between companies. Barriers to the further spread of new high technology are leading to inefficient and uneven results.

High technology and automation have led the demand for labor toward a higher technical and managerial profile.

High technology and automation have shifted labor demand towards higher technical and managerial profiles. In particular, the demand for routine and mid-level skills, which are the riskiest for automation, such as accounting and administrative jobs, and those in mass production, has declined. The labor market has seen increasing polarization: the share of employment in mid-skilled jobs has declined and high-skilled jobs such as technical professionals and managers. The share of low-skilled jobs has also increased, but non-routine manual jobs in most services, such as personal care, are difficult to automate. A simultaneous development is the growth of the gig economy or 'informal market economy', where more workers are subject to unconventional work arrangements, such as temporary or part-time contracts and self-employment.

 The supply of qualified staff to meet the demand has been slow. Education and training are losing out in the race for high technology (Goldin and Katz, 2008; Autor, 2014). Partly due to the shortage of high-level, technological skills required by high technology, which hinders the further expansion of innovation by different economies. Employees with complementary skills in high technology have become increasingly concentrated in leading companies on the technological frontier. In all sectors, skills disparities have increased: In OECD countries, on average, about a quarter of workers believe that there is a discrepancy between their skills and the skills required for their work (Adalet McGowan and Andrews, 2015). The relative lack of highly qualified staff has widened the gap between the premium and salary of qualifications, further intensifying income inequality (Hanusheket al., 2013; author, 2014). Although the proliferation of unconventional jobs has brought greater flexibility to the labor market, it has probably also contributed to the increase in wage inequality, as unconventional jobs (especially at low skill levels) are often associated with lower-income jobs than unconventional jobs.

Productivity and Equality: A Common Dynamic Agenda

To achieve stronger and more inclusive growth, the trend of declining productivity and increasing inequality must be reversed. Productivity and equity are often seen as a trade-off in economic debates, but recent research points to a significant complement between the two. The causes of the slowdown in productivity growth and the growing inequality are closely related, so there is room for a win-win policy by correcting both phenomena. There are inevitably tradeoffs, and underlying forces like technology and globalization will always create winners and losers. However, policies can help balance these effects. Promoting these objectives for linkages between productivity and equity requires an integrated approach to developing a policy agenda, an agenda that can take advantage of coordination and reduce trade-offs.

Technology is a powerful engine of productivity, long-term economic growth, and improved living. Technological change is inevitably disrupted, and the positive outcome is what Schumpeter calls "creative destruction". The way new technologies transform productivity increases depends on how policies manage these effects and processes. Technology also has a significant impact on how growth results are distributed, but again, the impact of the final distribution depends on how the government responds.

Advances in digital technology hold great promise. Its potential to increase productivity has not been fully exploited. Indeed, productivity growth has slowed, and income inequality has increased. Much of the recent political discussion has focused on blaming international trade for unemployment, lower wages for low-skilled workers, and growing inequality.

 The most influential factor has been technological change. A general set of factors (associated with the nature of new technologies and how they have interacted with policy failures) has led to limited productivity growth and inequality. As described in this article,

For better productivity and equity results, policies need to address the challenges of the digital age. A developed world can be created by reviving competition across technological frontiers and encouraging innovation, as well as expanding its reach across all economies, improving and upgrading the professional skills of workers, and reforming social contracts. Action plans must respond in the context of radical and continuous change.

The challenges are daunting and the political economy of reform is difficult, but fortunately, policy options are not limited to a binary choice between productivity and equity. Some policies can promote both. Lawmakers should address them through a comprehensive reform agenda.

Bibliographic reference

Acemoglu, D., y P. Restrepo (2016), «The Race between Machine and Man. Impact of technology for growth, factor share and employment », NBER working paper series, number. 22.252, Cambridge (Massachusetts), National Bureau of Economic Research.

Adalet McGowan, M., y D. Andrews (2015), «Labor market inequality and labor productivity. Evidence from PIAAC data 8, working paper of economics department, no. 1.029, Paris, OECD Publishing.

Andrews, D., C. Criscuolo y p. Gall (2016), “The Best vs. the Rest. Global Productivity Slowdown, Deviations Across the Farm and the Role of Public Policy», OECD Productivity Working Paper, No. 5, Paris, OECD Publishing.

Autor, D., D. Dorn, L. Katz, c. Patterson, and J. Van Renen (2017), "The Fall of the Labor Share and the Rise of Superstar Farms", NBER Working Paper Series, no. 23.396, Cambridge (Massachusetts), National Bureau of Economic Research.

Boldrin, M., y D. Levine (2013), "The Case against Patents", Journal of Economic Perspectives, vol. 27, number. 1, p. 3-22.