11-14-2016, 10:56 PM
But the troubling reality is that today’s advances are having a far from impressive impact on overall economic growth. Facebook, Twitter, and other digital technologies undoubtedly bring great value to many people, but those benefits are not translating into a substantial economic boost. If you think Silicon Valley is going to fuel growing prosperity, you are likely to be disappointed—or you’d better be patient. While the high-tech industry creates impressive wealth for itself, much of the country is mired in a sluggish economy.
Dear Silicon Valley: Forget Flying Cars, Give Us Economic Growth
Michael Mandel, an economist at the Progressive Policy Institute in Washington, D.C., says the productivity slowdown is occurring in what he calls the physical industries, including manufacturing and health care. Such industries, which he estimates make up 80 percent of the national economy, account for only 35 percent of investments in information technology and their productivity reflects that, growing at only 0.9 percent annually. Meanwhile, productivity is growing by 2.8 percent a year in what Mandel calls digital industries, which include finance and business services.
Dear Silicon Valley: Forget Flying Cars, Give Us Economic Growth