Executive summaries: Economic productivity 🏭

1. The idea of Productivity 📠

Source: The Bennett Institute for Public Policy, Cambridge. Read the full report here.

The idea: Productivity is integral to economic progress, but what actually is it? This report suggests that it’s what emerges from the coordinated application of knowledge capital. In other terms, it’s how well society uses its technology to achieve economic growth.

Key takeaways: The paper covers past attempts to define or add nuance to the idea of productivity. It lands on “ideas” as the strongest determinant of productivity. Understanding the nuance in defining productivity will be particularly helpful for public servants wrestling with the concept in their work.

Quote: “Productivity growth requires people in their capacity as both producers or workers and consumers to have new ideas, to accept and absorb ideas, to share them with others, and to act on them.”

2. Automation, unemployment and taxation 🦾

Source: EU Horizon-funded research for a forthcoming book, read the full chapter here.

The idea: Should we tax automation? Whilst, so far, automation isn’t translating into strong productivity growth, it is inflating the gap between high- and low-earners. Judicious taxation could help to remedy the divergence in fortunes. But that’s not without critics.

__Key takeaways: __

The argument for:

• Additional revenue
• Negates the bad luck of not having the right skills
• Tax neutrality (tax systems are biased against labour).

The argument against:

• Discourages investment
• Is it the best way to address the problem?

Quote: “Maybe, given our propensities to ignore the claims of the least advantaged, we’re pragmatically justified in using taxes to slow technological progress, despite the harmful economic consequences of doing so.”

3. The Productivity J-Curve: How Intangibles Complement General Purpose Technologies 📈

Source: American Economic Association, read the full report here.

The idea: We’re on the cusp of a productivity boom (says the author). Radical leaps in “general purpose” technology - in this case AI - causes dips (from investment and lags) in productivity in the short run, but translate into huge increases thereinafter. Hence the “J” curve.

Key takeaways: In many parts of the world, productivity has been stagnant for the past few decades. This report lays out the techno-optimism for the next surge in productivity. It uses a dataset from the USA to reach this conclusion.

Quote: “Technologies like AI enable and require significant complementary investments. These investments are often intangible and poorly measured in national accounts.”

4. Progress and Potential: 2020 update on U.S. women inventor-patentees 👩‍🔬

Source: United States Patent and Trademark Office, read the full report here.

Idea: Women inventors only accounted for 17.3% of patents in 2019. The invention gap is a problem, because inventors who identify as women are more likely to make inventions that serve women’s needs — especially regarding healthcare.

Key takeaways: Whilst a large gender gap persists in US inventions, it is showing signs of narrowing at an increasing speed.

Quote: “The share of patents with at least one woman inventor grew from 20.7% in 2016 to 21.9% by the end of 2019 and is growing faster than in the prior period.”

5. Corona Generation 🎒

Source: Polish Economic Institute, read the full report here.

The idea: People coming of age during the pandemic are at risk of becoming a lost generation. To prevent this, there needs to be significant financial support for young people's health, employment and education to catch up on pandemic setbacks.

Key takeaways: They estimate that young people will see a 6.2% fall in expected future wages due to lower returns to education. It'll also cost young people $1.7tn in the short-term, and $44tn in the long term.

Quote: "The overall annual increase in costs due to COVID-19-related mental health problems among young people is estimated at 0.49% of GDP worldwide."

6. The ‘hidden data’ that could boost the UK’s productivity and job market 💼

Source: Nesta, read the full report here.

The idea: Career planning/hunting is a complicated process. It’s made harder by the huge data gaps that job hunters face when they’re looking to match their skills to open opportunities.

Key takeaways: Building a central labour market data repository, along with similar recommended measures, could trim the labour market mismatch and boost productivity by 5% in the OECD. Neat.

Quote: “Publicly available data that could help people to make more informed decisions about their careers is often incomplete, difficult to use and poorly described.”