IE Brown EMBA THE GLOBAL ECONOMY: PAST, PRESENT, AND FUTURE First critical essay Hazim ZOUHAIR 14/07/2023 Challenging Gordon's Pessimism: Exploring the Limitations of Growth Measurement and Examining the Pace of Technological Progress in Comparison to the Previous Century Technological progress has been a driving force behind economic growth and societal advancement throughout history. However, Robert Gordon's pessimistic view on the future of technological progress raises concerns about the pace of advancement. This essay aims to question Gordon's perspective by highlighting the limitations of growth measurement and discussing the potential for technological progress in the next few decades compared to the previous century, particularly during Gordon's Golden Age. Additionally, we will explore examples of disruptive technologies that have the potential to driven faster growth and transformed industries. The material of the session 4 examines how Gordon's pessimistic case centers around the slowdown in measured productivity growth and the perceived decline in the speed of fundamental scientific advances. However, it is important to recognize the limitations of these measurements, measuring productivity solely based on traditional economic indicators (GDP, Productivity) fails to capture the full extent of technological advancements and their impact on economic growth. Many groundbreaking technologies, such as information and communication technologies, have transformed industries without being adequately reflected in measured productivity. This discrepancy arises due to the challenges in accurately capturing the contributions of intangible assets, dynamic market changes, and non-market sectors (Brynjolfsson & McAfee, 2014). Thus, relying solely on productivity measurements may not provide an accurate representation of technological progress. Furthermore, Gordon's emphasis on the slowdown of scientific advances overlooks the fact that breakthroughs in science and technology often have long gestation periods before translating into measurable productivity gains. The true impact of scientific discoveries may take years or even decades to fully materialize in economic terms (Mokyr, 1998). Therefore, the perceived decline in the speed of scientific advances may not accurately reflect the potential for future technological progress. Contrary to Gordon's argument that technological progress can only slow down, there are indications that the pace of advancement in the next few decades will surpass that of the previous century. The convergence of multiple disruptive technologies holds immense potential for economic growth and societal transformation. For instance, artificial intelligence (AI) and machine learning have revolutionized industries such as healthcare, finance, and transportation (Emanuel et al., 2019). AI-driven systems have automated processes, enhanced decision-making, and opened new avenues for innovation. Quantum computing is another innovation that has the potential to revolutionize various fields and profoundly impact the world, it has the potential to perform complex calculations at an unprecedented speed, enabling breakthroughs in cryptography, optimization, drug discovery, and scientific research that were previously infeasible. Preskill (2018) mentioned that quantum computers have the potential to "transform the world's economy, national security, and solve problems that are intractable for classical computers." Furthermore, blockchain technology has disrupted sectors like finance, supply chain management, and healthcare by providing secure and transparent decentralized systems (Swan, 2015). Renewable energy technologies, such as solar and wind power, have transformed the energy sector, driving sustainability and creating economic opportunities (IEA, 2021). These examples demonstrate how disruptive technologies are reshaping industries and driving faster growth. When comparing the pace of technological progress in the few coming decades to the previous century, it is likely that the former will witness faster growth. The advent of transformative technologies during Gordon's Golden Age, such as network electricity, radio, telephone, and antibiotics, led to significant advancements. However, the current era is characterized by a convergence of disruptive technologies that have the potential to reshape industries on an unprecedented scale. The exponential growth of technologies, the interconnectivity between various fields, and the rapid diffusion of knowledge through digital platforms contribute to the potential for faster progress (Brynjolfsson & McAfee, 2014). The Fourth Industrial Revolution, characterized by the integration of physical, digital, and biological systems, presents new opportunities for innovation and growth (Schwab, 2017). The emergence of advanced technologies like AI, blockchain, and renewable energy will likely result in faster progress, transforming industries and creating new economic opportunities. While Robert Gordon's pessimistic view on the future of technological progress raises valid concerns, it is important to recognize the limitations of growth measurement and explore the potential for faster progress. By acknowledging the shortcomings of traditional productivity metrics and considering the transformative impact of disruptive technologies, we can challenge Gordon's perspective. The convergence of technologies in the next few years, along with the continuous pursuit of scientific advancements, suggests that the pace of technological progress is likely to exceed that of the previous century. This accelerated progress has the potential to reshape industries, drive economic growth, and address societal challenges. References: Brynjolfsson, E., & McAfee, A. (2014). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W. W. Norton & Company. Mokyr, J. (1998). The Second Industrial Revolution, 1870-1914. In R. A. Gordon & J. E. K. Smith (Eds.), Economic Growth and Development (pp. 235-259). Palgrave Macmillan. Emanuel EJ, Wachter RM. (2019) Artificial Intelligence in Health Care: Will the Value Match the Hype? JAMA. Jun 18;321(23):2281-2282. doi: 10.1001/jama.2019.4914. PMID: 31107500. Preskill j. (2018). quantum computing in the nisq era and beyond. quantum 2 79 Swan, M. (2015). Blockchain: Blueprint for a New Economy. O'Reilly Media. IEA. (2021). Renewable Energy and Jobs: Annual Review 2021. Schwab, K. (2017). The Fourth Industrial Revolution. Crown Business.
