Creating value: Whither the boom?

 

The tech boom of the last few years or so has been absolutely revolutionary. Or, so we’ve told ourselves, read over and over and come to believe. I mean, can anyone remember life before Google, the Iphone and now, even Uber?

Turning to the broader economy, though, one has to ask: whither the boom?


As  George Packer noted in article  exploring attitudes in Silicon Valley in the New Yorker:

“one question is….why, during the decades of the personal computer and the Internet, the American economy has grown so slowly, average wages have stagnated, the middle class has been hollowed out, and inequality has surged. Why has a revolution that is supposed to be as historically important as the industrial revolution coincided with a period of broader economic decline….”

Despite the catchiness of the phrase “Software is eating the world” popularized by Marc Andreessen, perhaps we haven’t stopped to ask exactly what is left after the eating has been done. While the tech revolution has undoubtedly made life easier including access to knowledge, one has to wonder why this has not been reflected in other important measures of well being.

There remains  a gap between the all the excited talk of “disruption” and the actual perceived benefits via an increase in productivity and economic growth.

Are the perceived benefits waiting somewhere in the wings? Are we measuring the benefits using the wrong metrics to begin with?

Or has the economic system and/or concentration of markets become so dysfunctional that it is blocking the diffusion of these benefits?

We know that median wages have been, stagnant at best, and actually falling for the average male worker over the last 3 decades or so.  Its nice to be able to instantly post my thoughts online, but if my standard of living is not rising, what's the point? Many tech companies are undeniably creating value.  But if it's not producing real improvements in people’s material well being, then perhaps the hype around tech is a tad bit overdone.

This is a conversation I hope to continue having.