Richard Lester, MIT

Digital Technologies And The Productivity Puzzle
4 t h P A Ì S P R O D U C T I V I T Y S U M M I T | S a n t i a g o | S E P T E M B E R 7 - 8 , 2 016

“You can see computers everywhere except in
the productivity statistics.”
-- Robert Solow (1987)

Richard K. Lester

social media

“You can see computers everywhere except in
the productivity statistics.”

-- (2016)

Richard K. Lester

“You can’t shrink to greatness.”
Productivity =
growth
(Macro-economy)

Efficiency + Innovation
(Micro-economy)

Richard K. Lester

A broad-based productivity slowdown

Richard K. Lester

Why the productivity slowdown?
• Weak demand and underinvestment

• Shift to (lower-productivity) services
• Skills shortages

• Slowdown in global trade and spread of
efficient global value chains
• Etc.
Richard K. Lester

“We were promised flying cars, and instead
what we got was 140 characters.”

-- Peter Thiel

Richard K. Lester

Peak innovation?

Richard K. Lester

Peak jobs?

Richard K. Lester

Reasons for optimism

Richard K. Lester

1. We are learning new ways to innovate.

Richard K. Lester

2. Creative spaces are spreading around the world.

Richard K. Lester

3. Scientific advances (what is least visible
may be most impactful.)

Richard K. Lester

The Industrial Internet
GE’s most advanced turbines: Digital innovations are reducing time to market.
Sensors are generating data that could be as valuable as the machinery itself.

Digital technology and economic growth
Consumers
(consumer
internet, etc.)
Less
visible

Industry
(IoT, etc)

Science
(neuroscience, materials
science, synthetic biology, etc.)

Richard K. Lester

More
impactful

Thank you!

Richard K. Lester
Richard Lester is Associate Provost of MIT, where
he overseas the international activities of the
Institute. Dr. Lester is Japan Steel Industry
Professor of Nuclear Science and Engineering at
MIT and is also the founding director and chair of
the MIT Industrial Performance Center. He is
widely known for his research on innovation
management and policy. His books include
Unlocking Energy Innovation; Innovation – The
Missing Dimension; The Productive Edge; Making
Technology Work; Made By Hong Kong; and Made
in America. He is an advisor to governments,
corporations, and non-profit groups, and serves
as chair of the Board on Science, Technology and
Economic Policy of the U.S. National Academies.

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