Transcript Slide 1

Is the Information Technology
Revolution Over?
By David M. Byrne, Stephen D. Oliner, and Daniel
E. Sichel
2013 ASSA Meetings
Discussant: Chad Syverson
Overview
Paper’s analysis has three main parts:
1. Decomposition of LP growth into IT and non-IT components
and comparison between 1995-2004 and 2004-2012
2. Prediction of steady state LP growth going forward
3. Re-assessment of potential IT-driven growth in light of
evidence from semiconductor manufacturing
1. LP Decomposition: Is a Productivity (Re-)
Slowdown Historically Unprecedented?
The prior GPT diffusion event was the electrification (&
plumbing) era
Medium-run LP trends were not altogether different at that time
1. LP Decomposition: Is a Productivity (Re-)
Slowdown Historically Unprecedented? No.
Labor Productivity, Electrification and IT Eras
(1925 = 100 and 1995 = 100)
1970
180
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
160
140
120
Electrification
100
IT
80
60
40
1890
1895
1900
1905
1910
1915
1920
1925
1930
1935
1940
1. LP Decomposition: Is a Productivity (Re-)
Slowdown Historically Unprecedented? No.
Labor Productivity, Electrification and IT Eras
(1925 = 100 and 1995 = 100)
1970
180
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
160
140
Electrification
120
Electrification (cont.)
100
IT
80
60
40
1890
1895
1900
1905
1910
1915
1920
1925
1930
1935
1940
1. LP Decomposition: Is a Productivity (Re-)
Slowdown Historically Unprecedented? No.
Period
Annual Avg. LP
Growth (%)
Period
Annual Avg. LP
Growth (%)
1896-1915
1.0
1976-1995
1.4
1915-1924
3.3
1995-2004
3.1
1924-1932
1.0
2004-2012
1.6
1932-1940
2.7
2012-
?
2. Predicted Steady-State Future LP Growth
Forecasting is hard
Average future growth rates are hugely important
But recent patterns have convinced me median growth matters a
lot too
Forget normative issues—even positive implications will be
inescapable if pattern of past 3 decades continues
2. Predicted Steady-State Future LP Growth
Real Labor Productivity Growth vs. Real Median HH
Income (1950 = 100)
400
350
300
250
Labor Productivity
200
Median HH Inc
150
100
50
0
1950
1960
1970
1980
1990
2000
2010
3. Intel and Semiconductor Innovation: A More
Pessimistic View
Authors: semiconductor mfg. technology cycle hasn’t slowed
•Lithography process generation has held at ~2 years since 1993
•Intel’s CPU cycle has held up similarly
However, Pillai (forthcoming): while transistors per unit area
have continued to increase, chip designers have not been able to
fully harness these improvements
NYT, 9/1/09: “The computer industry has a secret. Yes, the
number of transistors on modern microprocessors continues to
multiply geometrically, but no one really knows how to get the
most out of all these new transistors.”
3. Intel and Semiconductor Innovation: A More
Pessimistic View
Wrap-Up
Thought-provoking paper: critical issues at hand