Take a look at the chart below and you’d come to the conclusion that something is very wrong with our nation’s productivity. That’s especially true when you take a look at the second chart that illustrates that our work days are getting longer and longer.
However, in a recent Wall Street Journal article, Silicon Valley Doesn’t Believe U.S. Productivity Is Down, contrarian economists at Google and Stanford say the U.S. doesn’t have a productivity problem. Rather, we have measurement problem.
Google chief economist Hal Varian says sluggish U.S. productivity doesn’t account for the high-tech wave of innovations that save people time and money. ‘There’s a lack of appreciation for what’s happening in Silicon Valley,’ he says, ‘because we don’t have a good way to measure it.’His point is that we all rely on free apps to boost our productivity, but because that technology itself registered as contributing to GDP, the gains achieved remain outside productivity calculations.
I am sure you will agree that “it’s not your grandfather’s ‘productivity’” anymore. When you measure technological advances, productivity will appear to increase like a “hockey stick graph.” And how we measure productivity as a nation and as individuals is an interesting question — especially as we transition out of the lazy days of summer and into the back-to-business month of September.