U.S. on the Cusp of a Productivity Boom, According to Latest Analysis Commissioned by Technology CEO Council
Embrace of Information Technology by Manufacturing, Agriculture and Healthcare Industries is Poised to Accelerate the Economy, Create Jobs and Boost Incomes
WASHINGTON — (BUSINESS WIRE) — March 28, 2017 — The Technology CEO Council (TCC) today released a new economic analysis, researched and written by renowned economic scholars Michael Mandel and Bret Swanson, that makes the case for a coming productivity boom enabled by the diffusion of information technology into the physical industries, including manufacturing, agriculture, healthcare, transportation and energy. Far from a jobless future, Mandel and Swanson's analysis predicts that increased use of information technology will make the physical economy more productive and American workers more valuable.
"Job and productivity growth has stalled in many industrialized countries, including the U.S.," says Mandel, chief economic strategist at the Progressive Policy Institute. "While some economists will put the blame squarely on IT for disrupting industries and destroying jobs, the surprising fact is that 70 percent of companies in the U.S. economy are not taking full advantage of the power of information technology. And that's the problem."
By comparison, digital industries have fully embraced information technology, building new products and platforms—the PC, the Web, the smartphone, cloud computing, electronic financial markets—all of which empowered further explosions of entrepreneurial activity and along with it, jobs.
"Applying the power of information to physical industries will unleash the potential for big gains in productivity without losing the benefits of job growth," says Bret Swanson, president of Entropy Economics LLC.
According to the report, this IT-enabled transformation could add $2.7 trillion to U.S. annual economic output by 2031 (in 2016 dollars), and grow federal revenues by a cumulative $3.9 trillion over the next 15 years, helping to pay for Social Security and Medicare.
In particular, The Coming Productivity Boom details a manufacturing sector in the midst of major transformation—not just by robotics and 3D printing, but by the emergence of smart manufacturing, a fundamental rethinking of the production and design process that will substantially boost productivity and demand, leading to the creation of a new set of manufacturing-related jobs and allowing American factories to compete more effectively against low-wage overseas rivals.
"We commissioned this report to better understand how new technologies can enable growth in the U.S. economy and what policies can best get us there," said Bruce Mehlman, Executive Director of TCC. "As this report makes clear, the opportunity to accelerate productivity and job growth is extraordinary. We believe smart public policies will hasten the diffusion of these technologies and enable innovation, entrepreneurship and growth."
Catalyzing this growth requires better tax policy, the free flow of goods, services and data around the world, investments in communications networks and in education and training, as well as an embrace of innovation among regulators.
The complete report is available for download at www.techceocouncil.org/productivityboom.
About Technology CEO Council
The Technology CEO Council (TCC) is the information technology industry's leading public policy advocacy organization comprised exclusively of chief executive officers from America's top information technology companies. TCC includes some of the nation's most well-known brands and globally integrated enterprises, generating more than $300 billion in annual revenues and employing more than 900,000 workers.
For more information about TCC, visit www.techceocouncil.org.