Does slow early productivity growth mean a new technology won't deliver?
Core argument: For the three decades after Edison began delivering commercial electricity in New York in 1882, inflation-adjusted output per worker grew just 0.5% annually, a sluggish pace relative to what electricity would eventually enable.
For three decades after Thomas Edison began delivering commercial electricity to New York customers in 1882, inflation-adjusted output per worker grew at just 0.5% annually—a sluggish pace relative to what electricity would eventually enable. The gains became evident only as the economy's capital stock and organizational practices adapted to the new technology: new factories designed around electric motors from the ground up, rather than retrofitted from steam. Some of the impetus for this replatforming came from the weapons production spurred by World War I. In the decade after 1917, productivity growth more than doubled its prior three-decade average. The implication for AI is that a near-term absence of productivity acceleration in the aggregate data should not be read as evidence that no acceleration is coming.