Can Artificial Intelligence, Robots, 3D Printing and Digital Innovation Drive Growth? / by FPM Team

Comments about economist Robert J. Gordon’s recently published book "The Rise and Fall of American Growth” include: 

  • Peter Thiel (entrepreneur, investor) -” If we're going to create more wealth in the future instead of arguing about dividing a shrinking pie, we have to read and understand this book”,
  • Larry Summers (Harvard University) - “Gordon makes a compelling case that the golden age of growth is over. Anyone concerned with our economic future needs to carefully consider his argument"
  • Robert Samuelson, (Washington Post) - “What Gordon has provided is not a rejection of technology but a sobering reminder of its limits."

Excerpts from the book:

  • “Will artificial intelligence, robots3D printing and other offspring of the digital revolution do for economic growth what the second industrial revolution did between 1920 and 1970? The techno-optimist school of economics says yes. I disagree.  The rise in the U.S. standard of living from 1870 to 1970 was a special century -- and won't likely be repeated"
  • "The good news is that the economy will be able to maintain relatively full employment as the fruits of computerization cause work to evolve slowly, rather than in a great rush. I'm optimistic that job growth will continue and that new jobs will appear as rapidly as technology destroys old ones.” 
  • “True, innovation continues. Almost weekly, the stock market rewards new companies with initial public offering valuations of a billion dollars or more. But it's important to distinguish between the pace of innovation and the impact of innovation on productivity.”
  • The problem created by the computer age isn't mass unemployment but the gradual disappearance of good, steady, mid-level jobs that have been lost to robots and algorithms and also to globalization and outsourcingEmployment growth is also concentrated in routine, manual jobs that offer relatively low wagesSlower productivity growth and low-wage jobs are leading to the unequal distribution of productivity gains. Those are the real headwinds that America faces.”

OUR TAKE

  • Gordon's research, which focuses on factors driving historical growth trends, makes many good points.
  • We should remember that productivity improvements and population growth, rather than the pace of innovation, are fundamental drivers of economic growth.
  • Hopefully, Gordon’s views can provide a constructive framework for policy makersbusiness leaders and citizens as they consider their strategies for the future.