WASHINGTON—The Technology CEO Council (TCC) today released a new economic analysis, co-researched and written by PPI Chief Economic Strategist Michael Mandel that shows a coming U.S. productivity boom enabled by the diffusion of information technology (IT) into the physical industries, including manufacturing, agriculture, healthcare, transportation, and energy. Far from a jobless future, Mandel’s co-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. “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.
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.
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. In turn, smart manufacturing will lead to the creation of a new set of manufacturing-related jobs and allow American factories to compete more effectively against low-wage overseas competition.
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.