Impact of the technology revolution has barely begun
That we haven’t seen the full impact of IT is a comment I heard the first time a few years ago. That sort of made sense but didn’t really register. This blog is focused on sorting out that change. The idea that the technology revolution has barely begun finally clicked for me with a column by Matthew Yglesias – Why I’m Optimistic About Growth and Innovation.
A few industries have seen huge impact from technology. Think of book publishing, journalism, and music. Those industries have been turned upside down. I read a lot and listen to a bit of music so am quite attuned to those areas. The way everyone consumes news has been transformed. I regularly read dozens of blogs a day. They just appear on my computer screen with a mouse click or two. I’ve always been a news junkie, and my consumption has soared in the last few years.
However, as big as those industries are, they are a small part of the total economy.
Mr. Yglesias makes the comparison to the movable type printing press. It was a radical change, but because book printing was such a tiny part of the economy then, it didn’t have an immediate impact on GDP.
Likewise with IT. The impact on books, news reporting and music is huge, but those aren’t a big part of the economy.
Here’s the point –
Wait until the revolution that we’ve seen in music and books hits big sectors of the economy, like education and health care and manufacturing.
Then there will be massive change and improvement in the economy. The productivity per person will skyrocket, which means the GDP per person will take off like the space shuttle blasting off the launch pad.
A hint of what is to come
Look back just a few years in the energy sector. Consider two new technologies.
First, the astounding ability to change direction on a drill and control its location 10,000 feet underground and out 10,000 feet horizontally from there. Could you push a 20,000 foot piece of steel piping through solid rock and have the tip be exactly where you want it to be, plus or minus a few feet? Here’s a simpler test, could you push a 20,000 foot long stick across the ground and without see the stick, have the tip end up within 20 feet of where you want it to be? That’s being done 200 times a month in North Dakota
Or use a straw-at-the-beach analogy. Could you connect hundreds of drinking straws together, push a 1,000 foot length of straw across the beach a few inches under the sand, make a right turn somewhere and place the tip of the straw where you planned it to be plus or minus 5 times the diameter of the straw? Oh, and you can’t see where the straw is at any point.
Second, look at the ability to pump water, sand, and a bit of chemicals out to the end of that 20,000 foot pipe at 6,000 pounds of pressure per inch and maintain the pressure for a couple of days as you put a few million gallons of mixture into the ground. Astounding use of technology.
So what has that technology done in the energy field?
- Turned North Dakota into the second largest oil-producing state in the country. More than Alaska or California.
- Put US oil production back to where it was over 20 years ago.
- Makes it a reasonable possibility the US could be a net energy *exporter* in a decade or so. An exporter.
What happens when the kinds of tech we see in energy hit education and health care?
How about manufacturing? How about clothing? All consumer goods?
So yeah, as mind-boggling as your smart phone and tablet are, the tech revolution is barely getting started.
Comparable to the Industrial Revolution?
Via Meadia is quite Bullish on Technology when they say:
The world is in the middle of an information revolution every bit as large and sweeping as the industrial revolution was in the 19th century. Propelled by new technologies in telecommunications and cloud computing, this burgeoning revolution has the potential to make new products and services more widely available while opening up whole new areas of employment for millions of people.
Picture that – a revolution has just gotten started that is as dramatic as the entire industrial revolution.
Remember what that did to GDP per person
Here are some of my related posts that connect the dots – look at the change appearing in education and health care:
- Major hurdle cleared for on-line education – Dep’t of Eduction approves financial aid for degree based on demonstrated competencies, not number of semester hours
- Indications of productivity improvement for on-line education starting to appear
- What your visit to the doctor may look like in 2023
- Technology revolution becoming visible in health care.