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Bull Session

The Productivity Paradox

November 16, 2018          

Episode Summary

This week on The Digital Life, we discuss the Productivity Paradox, inspired by the recent article in MIT Technology Review, “Advanced tech, but growth slow and unequal: paradoxes and policies”. While we’re experiencing an unprecedented boom in technology, the accompanying massive productivity boost that we might expect to see has failed to materialize. In fact, in many major economies, productivity growth is slowing. So, what’s the reason for this unexpected outcome? To begin with, our ability to absorb, integrate, and leverage technologies effectively — from mobile to artificial intelligence to the internet of things — has limits. While the technology might be present, it is not been distributed and utilized in ways that have yielded productivity gains in rapid fashion. Constructing the systems, workflows, and roles to take advantage of these new technologies will take time. And, in concert with these, it will be vital that, as a society, we develop policies that support and enable people to shift into new work roles and invest time in learning new skills. Join us as we discuss.

Advanced tech, but growth slow and unequal: paradoxes and policies


Welcome to episode 284 of The Digital Life, a show about our insights into the future of design and technology. I’m your host, Jon Follett, and with me is founder and cohost Dirk Knemeyer.

Greetings listeners.

This week we’re going to be talking about the productivity paradox, so called, which is inspired by the article in MIT’s Technology Review magazine called, “Advanced tech, but growth slow and unequal: paradoxes and policies”. So, in the short article on technology review, there’s actually quite a bit of sort of broad policy recommendations which we may get into some of those, I doubt we’ll cover them all in our show today, but encourage listeners to check out MIT’s Technology Review magazine, which is a lot of fun to read.

So, the article presents this so called productivity paradox, which is essentially sort of mapping this boom in technology. So we have all our fantastic digital technologies that we talk regularly about on the show. And then sort of maps that to this strange results which is slowing productivity growth in major economies across the world. So what is the reason for this increase in technology and then subsequent sort of flat lining of productivity? And that’s sort of what the article digs into and suggests some policy tweaks or a full out changes in some areas that I tend to agree with.

What’s funny is the premise itself, the productivity paradox, I find kind of funny because it’s this idea that this one thing that we’re measuring, which is sort of how effectively and efficiently we can create value is this really important metric. And I understand, yes, from an economic perspective that may really a critical metric. I think it’s also interesting or important that we consider that efficiency and productivity are not the sole important metrics of our day to day lives and economy. But we won’t dig into that argument too much on the show.

I mean, the bottom line Jon is that that’s 19th century thinking. Those are constructs and systems and economic theories that were developed now hundreds of years ago, totally out of step with where we’re at today and where we’re going tomorrow.

Yeah, that’s a great way of putting it. Thanks for phrasing it that way. The thing that I do think is interesting, and what the article cites as a problem is this technology penetration throughout various businesses and users and people throughout the economy. So the technology is there but it’s not being used to its full potential, or even to in some cases any of its potential. And this is what is causing this productivity paradox.

So let’s dig into that, that question, right? So what’s interesting is we can take a look at pretty much any emerging or even some what we’d call standard technologies now and we can look at each of those and see how poorly they’re being used. So now, not to pick on the internet of things because there was obviously his huge hype cycle in 2017 and 2016 in which pretty much everything was going to be connected to the internet of things. That hype cycle’s since moved on to artificial intelligence. Now everything’s going to have artificial intelligence in it. he Internet of things. That hype cycles since moved on to artificial intelligence. Now everything’s going to have artificial intelligence in it. Thanks very much technology press.

But the Internet of things, even though it’s sort of current chunks along and we’re seeing more and more evidence of sort of sensor laden products, buildings, cities, et cetera, slowly coming online that the truth is that this is a multi year process to get these products, and even longer for things like smart cities to get online. And then after that, you’ve got this sea of data which some may be useful, some may not be useful. And take years to pour through that. And then figure out how you are going to automate things around that data, which means you need to recognize the patterns in the data and then make tweaks and then see how those adjustments work out.

And that’s very realistic scenario and that doesn’t even take into account all the operation and maintenance, things failing, projects not getting financing or getting off the ground. So this is not what we talk about a lot in the technology industry but it’s the very un-sexy adoption of technology over time. And if you look at graphs and charts of the 20th century and seeing how long it took electricity, cars, electric lights, telephones, all these things to achieve market penetration and become useful to people, you’ll see that it takes tens of years for this to happen.

So sorry if that busts the hype cycle for folks but I mean, it wouldn’t be much of a sale if you say hey, let’s get your smart city online. A decade later you might see something out of it.

Yeah, we’ve talked, I know you and have I talked about this a lot. I’m not sure how much we’ve talked about it on the show but it’s an infrastructure problem. It takes a long time to have physical infrastructure that people have invested in that’s in place at the personal level like a home, at the city level like the vast infrastructure undergirding the cities that we live in. It’s just non trivial to transform those things. There is a level of physical barrier that does move it into decades instead of months or years.

Now, what’s interesting though is with software we see much faster evolution, with personal consumer technology, particularly today, we see much faster evolution. Like if we think about it, an analog might be thinking about like televisions and radios, which those technologies also moved more slowly back then. But the limitations weren’t infrastructure based. They were technology based.

Today technology is developing at a much more rapid pace. And so we see, for example, the evolution from an iPod to an iPhone is less than a decade. And that’s massive. I mean that’s revolutionary. So a lot of it is about the context and what the physical constraints are and sort of the bigger the thing, when you, again, when it’s a level of a home or a city, the more that those constraints, it doesn’t matter where the tech is, you’re just going to hit that like a fricking hammer because people don’t have the money. The country doesn’t have the money. We can’t just re-implement everything.

That’s right. And to add to your infrastructure comment, I would also say there are sort of workflow and process and on a deeper level or a cultural issues that come along with each of these technologies. So I’ll give an example. For instance, in say like the late 90s, early 2000s, working remotely was still sort of just a weird thing that you had to get permission to do, right? So it was permission based, sort of like, hey, you’re getting special treatment, you get to work at home in your pajamas, you’re taking advantage of the system and technology is allowing you to do this in some way or another.

Today, there are companies that for better or worse, right, are, are entirely virtual. They don’t have headquarters anymore. They work from a combination of shared office space, people working at home and then convening in sort of rented space when they need to sort of hold large events or meetings. So that’s a generational change. It took a solid 20 years for the idea of the virtual company, and I’m sure there were some early adopters of that. But this sort of cultural norm that is the expectation of a pardon the phrase, maybe maybe the younger set the millennial set, right? That was not the case when as a Gen X where I was thinking, hey, it’d be nice to work home one day a week at one of my earlier places of employment. And they were like, nope, you gotta be here. You gotta be in the office.

That was a, my boss’s boss was an older school gentlemen and really wanted everybody in the office. Flex time was considered revolutionary. The fact that I didn’t come in at, I wasn’t there at like eight o’clock in the morning. I came in at like nine-thirty, that was nuts. So that was unheard of.

Yeah, I mean we’re running into other barriers now. You know, we talked about technology and infrastructure, but those are cultural barriers right? Culture can slow things down as well. Certainly the technology has been in place for remote work going back to relatively early days of the internet. I mean, my career after graduate school started in ’99 and the technology was there for me to work at home just as much as I am today. Now there’s new software, like right now we’re using Zoom, which is a better piece of software to sort of enhance the connection between the remote working and the HQ so to speak.

But those differences are marginal. When we have email and everybody was using email professionally, which is basically 20 years old now, we had the tools that we needed along with old school telephones, mobile phones to work remotely. But the cultural gravity well of there’s this other way that things are done and those things are based on all of these beliefs, assumptions, values, frames of the world. It took a long time to overcome that.

So there’s all of these factors. It would be interesting to read and maybe somebody already already written something about it. I haven’t come across it, that sort of breaks down all of the factors that block implementation to go from technology or concept to manifestation in the world. Because it’s super nuanced.

Yeah. I mean, and I can think of tons of examples of this in our practice at the studio, at Go Invo, where we encounter healthcare software and technology. And a lot of the barriers to adoption are the way people have gotten used to doing things. I hate to say it but the fax is still a popular way of transferring information in certain areas of healthcare. I mean that’s just [crosstalk 00:13:13].

Yeah, healthcare government banks, like giant old, slow institutions still use that. Whereas younger industries think it’s bat shit crazy basically.

Yeah, I don’t know what to do when I encounter a required field that says fax. I just enter all fives or all ones. I’m sure you do the same. So if those are all the factors that sort of make realizing productivity from all these technological advances, if those are some of the different factors that make it difficult right now, we can only assume that those same blockers are going to be in the fact as further technology develops and intersects and creates all these promising possibilities. Whether it’s artificial intelligence powered software, genomics powered healthcare, the aforementioned internet of things, creating smarter cities. These are all going to run for the buzz saw of infrastructure and culture.

And I think where there’s enough capital to force those things through, in very select areas, I think we’ll see some successes, also making hampered a little bit by all of the problems that early adopters experience of course.

Sorry, you know Jon, when you were saying that, if they had the vision, the place to do it would be some place like Dubai. Instead of taking that blank slate and investing in Bentleys and old school, or very modernly designed but still skyscrapers, instead of investing in these 20th century icons of progress and success, if they said we’re going to take just the most ballsy technology and build whole communities using it, boy that’s the sort of case where you could really see something happen. Because you have huge areas with lack of infrastructure. You have gigantic amounts of money. You have people wanting to show how powerful and smart that they are.

That’s the, to me if somebody wanted to leap forward and say look what’s possible, that would be the kind of situation where to do it.

  Yeah, I’m sure that there’s, I’m not familiar with the economy of Dubai. I know that there are various initiatives around innovation in the Middle East, precisely because of, I mean eventually the oil does run out and they have to have other industries. But yes, point taken. That would be the perfect storm of lack of infrastructure and sort of the possibilities of great wealth.

So this article sort of concludes with some recommendations around policy, which I think are useful. And one of those, of course, is this idea about pace of change for the worker and the ideas around what do we have in place to allow people to adapt to new industries, to change in their industry, to maybe even taking on a whole new set of skills that they never thought they would need to learn. We’ve dealt with this topic a bit around the idea of AI automation and I think you and I are fairly adaptable in adopting skills. But certainly on a large scale I could see tremendous need for this ongoing education and re-skilling of workers.

So I did think that policy recommendation, of course broad and not including a lot of specifics, that’s the right direction. We’re really not talking about that too much as a country yet. I would almost see an additional layer to the education system that’s required. We have our public schools and we have public and private colleges. I think there’s another layer of education that needs to happen in order for modern economies to be able to continue to be productive and compete in the future.

If you go back to some our past episodes like with Ben Nelson, I think what he’s doing at Minerva, it’s not revolutionary really. It’s sort of a big stride that’s different from where we are now. But it’s sort of foreshadowing the kinds of things that will need to be happening, where the education is more integrated into communities, where the sort of teacher, student relationship is one that is more virtualized. That these sort of curriculums are more integrated and more sort of practical. And a sort of professional oriented at the end of the day. So I think there are blueprints of where that will go. It’s just going to take time, time for it to evolve as always.

Yeah and I loved that interview and episode on Minerva. It got me to thinking that we talk a lot at Go Invo about owning your healthcare data and the patient being the center of, 99% of your health happens outside of the doctors office, right? I suspect that it’s not going to be 99% of your education happens outside of school. But the idea that there’s this huge chunk of education that’s going to be required once you’re outside of the so called years where you’re a student. So it’s expected for younger folks to be students through high school and into college. But it’s less so expected for adults to be part of that and continually learning.

I’d love to have my own repo of education and whether it’s virtualized or not and just be able to track what I’m learning over time and continually learn. I think owning our educational mechanisms in some shape or form, whether it’s to show the credits, so it shows that I’m learning, or just simply for our own ability to track these things, I think the student as the center of education might be an interesting model in the future as well.

Listeners, remember that while you’re listening to the show you can follow along with the things that we’re mentioning here in real time. Just head over to the, that’s just one l in the digital life and go to the page for this episode. We’ve included links to pretty much everything mentioned by everyone. So it’s a rich information resource to take advantage of while you’re listening or afterward if you’re trying to remember something that you liked. You can find The Digital Life on iTunes, SoundCloud, Stitcher, Player FM and Google Play. And if you’d like to follow us outside the show you can follow me on Twitter at jonfollett. That’s J-O-N F-O-L-L-E-T-T. And of course the whole show is brought to you by GoInvo, a studio designing the future of healthcare and emerging technologies, which you can check out at That’s G-O-I-N-V-O dot com. Dirk?

You can follow me on Twitter at dknemeyer, that’s at D-K-N-E-M-E-Y-E-R and thanks so much for listening.

So that’s it for episode 284 of The Digital Life. For Dirk Knemeyer, I’m Jon Follett and we’ll see you next time.



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Jon Follett

Jon is Principal of GoInvo and an internationally published author on the topics of user experience and information design. His most recent book, Designing for Emerging Technologies: UX for Genomics, Robotics and the Internet of Things, was published by O’Reilly Media.

Dirk Knemeyer

Dirk is a social futurist and a founder of GoInvo. He envisions new systems for organizational, social, and personal change, helping leaders to make radical transformation. Dirk is a frequent speaker who has shared his ideas at TEDx, Transhumanism+ and SXSW along with keynotes in Europe and the US. He has been published in Business Week and participated on the 15 boards spanning industries like healthcare, publishing, and education.


Co-Host & Producer

Jonathan Follett @jonfollett

Co-Host & Founder

Dirk Knemeyer @dknemeyer

Minister of Agit-Prop

Juhan Sonin @jsonin

Audio Engineer

Dave Nelson Lens Group Media

Technical Support

Eric Benoit @ebenoit

Opening Theme @aivatechnology

Closing Theme

Ian Dorsch @iandorsch

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