Why does technology so often disappoint?
Last week I wrote about cryptocurrency, which is sort of becoming the monetary equivalent of the old joke about Brazil: "It's the country of the future, and always will be." The article drew a predictable wave of outrage from crypto fanatics — and there are no fanatics like crypto fanatics. What probably offended them most was my observation that this "revolutionary" technology is actually getting kind of old — Bitcoin was invented in 2009 — and has yet to find significant legitimate uses. |
Cryptocurrency isn't the only technology to disappoint. Self-driving cars were supposed to be ruling the road by now. And basically nothing in the 1968 movie "2001: A Space Odyssey" has happened yet; neither the space hotel nor the homicidal computer. (OK, we do have video calls.) |
Not everything has fallen short. Solar and wind power have made incredible progress. And I assume I'm not the only person who, forced into trying new things during quarantine, discovered that you can produce some pretty amazing meals in an electronic pressure cooker. |
Still, the data bear out the general sense that the real-world utility of new technology has fallen far short of the hype. Labor productivity — real output per person hour — has risen only about half as fast since 2007 as it did in the generation after World War II. Why measure from 2007? Well, it was the eve of the financial crisis; but it also happens to be the year Apple introduced the original iPhone. So much technoglitz; so little G.D.P. Why? |
A new paper by Erik Brynjolfsson, Seth Benzell and Daniel Rock tries to answer that question; to their credit, given that Brynjolfsson in particular has built a career emphasizing the revolutionary changes technology is bringing, one of their options is that when all is said and done, new technologies, while eye-catching, aren't all that. Their favored explanation, however, boils down to: just you wait. The idea is that it takes a while for businesses to figure out how to make the best use of radical new technologies, and that you shouldn't expect big things until they do. |
I like this argument, and I would find it persuasive … if I hadn't heard it all before. |
You see, this isn't the first time information technology has disappointed. During the 70s and 80s computers proliferated with astonishing speed; you young whippersnappers have no idea how big a deal it was to have your own screen and keyboard sitting on your desk. Yet the economy remained mired in a long stretch of productivity stagnation. As the great M.I.T. economist Robert Solow remarked, "You can see the computer age everywhere but in the productivity statistics." |
Enter the economic historian Paul David, with a fascinating 1990 paper titled "The Dynamo and the Computer." David showed that it took decades before the advantages of electrification really showed up in economic growth, because it took time before, to take one example, manufacturers realized that replacing overhead shafts and pullies with electric motors meant that factories could be sprawling structures with wide aisles, not cramped multistory buildings with a steam engine in the basement. |
David's point was that we could expect something similar with computers: eventually businesses would learn what to do with them, and productivity would surge. Sure enough, around 1995 U.S. productivity growth really did take off, beginning a rocket-like ascent. |
Which lasted for around a decade, then stalled out. |
Maybe this time is different. But so far the fact is that in an era when we talk constantly about technology and glamorize techies, the actual economic payoffs have been largely — not universally, but largely — disappointing. And because we've been through this kind of disappointment before, it's hard to avoid feeling a bit cynical. |
The technologies that seemed "highly likely" in the 60s; most didn't make it. |
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