Economists Robert Gordon and Erik Brynjolffson debated the future of work and innovation at TED2013. Gordon has received a lot of publicity over the last year for his white paper: “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds”. I have also researched what investments have done well through historic economic stagnation and volatile periods, and provided some suggestions on what might do well in the future.
The debate over longterm economic outlooks is being widely discussed among economic and investment professionals, making this TED video extremely informative and timely.
Gordon sees the candlestick — he believes that the growth could be tapering off for good and that our best innovations may be behind us. As he points out, between 1900 and 1960, we went from traveling by a horse and buggy to taking Boeing 707s. But in the sixty years since, we haven’t learned to go any faster at a mass commercial level. What’s wrong? In his talk, he outlines four headwinds which are keeping us from continued growth at the pace of the past two centuries: demographics, education, debt and inequality.
Meanwhile, Brynjolfsson sees the faces. He says that the stagnation may simply be growing pains as we move from an economy based on production to one based on ideas. He also looks to the past for an example, taking us back 120 years to the Second Industrial Revolution. While all the tools were in place for mass production, it took three decades for productivity to skyrocket. The first generation of managers — who had old ideas about systems and workflows – had to age out of the system for growth to start. This is where Brynjolfsson thinks we are now. He sees another wave of innovation in our future — if humans can learn to work alongside computers and robots in more symbiotic ways. (TED)