Productivity growth has slowed since 2004, and nobody is sure why.
Certainly, technology has done its job. In the wake of downsizing, budget cuts, re-engineering and outsourcing, it has filled in the gaps at company after company. As a result, supply chains are efficient and lean, the financial services industry is automated and manufacturing processes are flexible.Â
One theory that may explain declining productivity growth has been advanced by management consultancy McKinsey & Company, which believes that companies have finally cut the non-complex transactional positions that benefit from productivity-stimulating technology. All that's left are complicated and nuanced jobs requiring experience, expertise, judgment, interaction and collaboration—or tacit knowledge. Increasing productivity for employees whose jobs can't be automated has thus far proven to be a challenge for software developers.
After the invention of the assembly line, production growth exploded. Then the digital revolution created another surge in productivity. But growth has begun to decline. This article proposes essentially that we've moved beyond simple mechanical and digital improvements to create growth--the shift to high-tech jobs requires a whole different way of operating that requires paths to growth that we haven't even thought of yet.