Why is technology not making us more productive?
Why is technology not making us more productive?
We are in the midst of a technological revolution, but productivity has not improved.
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It has outside the UK, like the oft-presented US graph of earnings vs. productivity.
The issue in the UK is the flood of cheap labour which led to a reversal in automation e.g. car washes becoming manual again instead of machines.
As they mention in the article - the UK is almost entirely dependent on American Tech companies for cloud services, etc. so all those numbers end up better reflected in the American economy.
Really you need policies that drive a high-wage, highly productive economy - free education, high minimum wages (to effectively ban non-automation), scrap in-work welfare like tax credits subsidising unproductive companies, etc.
I feel like rich people in the UK don't want to invest in tech or new ideas. That's the reason Silicon Valley exists: there's smart people and willing investors there.
Even so, it's mainly CA, NYC, and maybe Boston doing the heavy lifting in the US. The rest of the country is just some cows and corn. Maybe Chicago has tech companies now. Deep dish tech? I dunno.
You're selling the the rest of country short - there's a lot of businesses in Seattle, Redmond, Portland, Austin, Dallas, Boulder, Chicago, Philadelphia, etc.
I think the main issue is that all the money pools in the US due to their big international businesses and monopolies, leading to higher productivity and salaries, and so all the investors in the US. And the US investors mostly want to invest in the US as they can use USD and their US bank account, and US legal protections, etc. with everything in English and so on. The US is also a much bigger consolidated market with one currency, one language and generally one set of laws (although some states differ depending on the industry) - making it easy to scale up an operation (although Sales Tax implementations are a complete disaster being at the county-level - wtf).
Countries (and economic blocs) need their own companies. I think in Europe we can learn a huge amount from China's success with Baidu, WeChat, ByteDance, Huawei, Xiaomi, etc. and even Russia with Yandex, Mail.ru, VK, etc. - this helps keep the money in the same area and leads to re-investment.
Otherwise it's just the same as being a banana republic - just serving as cheap labour for American corporations who send all the profits back to the US, and might even be outright hostile to democracy like ITT and United Fruit / Chiquita (both American corporations).
The over-regulation is a big problem too - we need to make it as easy as possible for people to take calculated risks and try start-ups, but here in Europe a lot of companies ban you from having your own side-work as an employee or contractor, you have to file taxes manually and some bureaucracy with the bank and accounting, etc. and then for Tech you have the GDPR and data privacy stuff to deal with.
Thank you, interesting perspective
The UK has a poor investment culture. Funds are concentrated into unproductive areas like landbanking and housing development because they have the largest return in our ridiculous property market, while investment into actual emerging technology development is neglected and the UK ends up as a client nation to the US.