How to improve productivity? Make sure it’s shared broadly — Simon Johnson

MIT Sloan Professor Simon Johnson

From The Washington Post

We know what productivity growth requires: investments in new technology. For previous generations, this was factories full of machines, first powered by steam and then by electricity. More recently it was the arrival of computers, which changed how work was organized within and across firms.

We often perceive the impact of new technology imperfectly and with a lag, and today is no different. We can see a wave of hardware and software innovations underway — technologies such as 3D printing and distributed ledgers will allow manufacturing and finance to become more dispersed — but it is hard to know exactly where it will take us.

To make sure the United States remains on the leading edge of this wave, we first and foremost need stronger human capital — economists’ jargon for training and appropriate skills in the workforce. But we also need to create a social governance environment that allows technology to grow. With the right approach, we will be able to share the benefits of new innovation more broadly so that people who cannot work effectively with new technology will not be left behind.

The best response for the next administration includes public investment in education. But what skills exactly are needed? To some extent this is obvious — stronger ability to work with computers, which requires better math skills along with science and engineering. But a constructive and more far-reaching partnership between public education and private sector employers would be a great help. This has not, in the past, been a strong point in the United States. But a modern apprenticeship program could be one piece of the puzzle.

Read more at The Washington Post

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