The Debate Zone: Has the US passed peak productivity growth? | McKinsey & Company

May 23, 2011 · · Posted by Greg Lloyd

See the lively McKinsey & Company What Matters debate, Tyler Cowen: "Yes. The big gains in the 20th century resulted from transformative innovations that are much rarer today." versus Andrew McAfee and Erik Brynjolfsson: "No. We’ve only just begun to reap the productivity benefits of digital technology." Read the analysis, lively comments, and jump in! My two cents (also posted as What Matters comment): I agree with Andrew McAfee and Erik Brynjolfsson's analysis that digital technology - including but not limited to the Web, communications and computer technology - is a GPT that "leads to fundamental changes in the production process of those using the new invention." and whose impact on productivity will be felt over decades, not years.

In a narrower domain of technology, Bill Buxton refers to this as "The Long Nose of Innovation" (link below)

Buxton cites a 2003 report presented by Butler Lampson to the Computer Science and Telecommunications Board of the National Research Council in Washington which traced the history of a number of key technologies driving the telecommunications and information technology sectors.

"The report analyzed each technology (time-sharing, client/server computing, LANs, relational databases, VLSI design, etc.) from first inception to the point where it turned into a billion dollar industry. What was consistent among virtually all the results was how long each took to move from inception to ubiquity. Twenty years of jumping around from university labs to corporate labs to products was typical. And 30 years, as with the mouse and RISC processors, was not at all unusual (and remember, this is the "fast-paced world of computers," where it is "almost impossible" to keep up)."

Buxton concludes: "Any technology that is going to have significant impact over the next 10 years is already at least 10 years old. That doesn't imply that the 10-year-old technologies we might draw from are mature or that we understand their implications; rather, just the basic concept is known, or knowable to those who care to look."

I believe that the fundamental value of the GPT we call the Web is as part of an interlocking set of communication and information technology capabilities organizations *can* employ to reduce the friction of knowledge work across space and over time, as well as fundamentally shift channels of marketing, sales, and distribution.

Assimilation and productive use of these new capabilities requires organizational change and innovation as profound as the technology driven changes of the Industrial Revolution. Steam, railroads and electricity fundamentally changed the economics of production of material goods - as well as introducing new media like radio and new travel and leisure markets.

I would not be surprised to find that the long nose of Enterprise 2.0 innovation enabled by this GPT (with a tip of my hat to Prof McAfee) spans 30 to 50 years.

The Long Nose of Innovation
Bill Buxton, Business Week, Jan 2, 2008

[Bloomberg BusinessWeek image] Bill Buxton is Principal Scientist at Microsoft Research and the author of Sketching User Experiences: Getting the Design Right and the Right Design. Previously, he was a researcher at Xerox PARC, a professor at the University of Toronto, and Chief Scientist of Alias Research and SGI Inc.

Enterprise 2.0 Schism
Greg Lloyd, Traction Software Inc, Nov 9, 2009