Have all the important things already been invented?

Some economists argue that the big, world-changing innovations have already been made, and we've been piddling around the edges over the past decade. Fair statement?

There has been a debate raging as of late. That is, according to traditional productivity measures, the economy has not been doing that great, and that progress stopped somewhere around 2004. But is something missing from the measurements?

In a recent article, Clive Crook presents the two sides of an argument that stalled productivity means stalled economic advancement. One one side, Crook cites Northwestern University's Robert Gordon, who says that 90 percent of all gains from digital technology were already realized by 2004.

In a 2012 paper surfaced by Crook, Gordon alleges that from a technology standpoint, the only major innovations we have seen over the past decade is relatively trivial window-dressing -- such as entertainment devices:
"All the really valuable inventions have been invented. The amazing surge of progress from the age of steam to the arrival of cheap computers was a historical anomaly (for century after century before, there had been little or no growth), and this blip of momentous ingenuity may be over. Everybody is enchanted by the Internet and related innovations, but these aren’t in the same league as electricity and the internal combustion engine -- breakthroughs that powered growth for the better part of a century."
The other side of the argument is that electricity and the internal combustion engine -- while significant inventions in and of themselves -- really saw their value by enabling new generations of inventions to be built on top of them (such as autos, telephones and televisions). This is also the case with digital technologies.

MIT's Erik Brynjolfsson and Andrew McAfee suggest that we've only just begun our journey down the digital innovation road. A transformation greater than that of the Industrial Revolution of the late 1800s is reinventing work and society -- but we haven't been able to see the big picture yet. Technology is driving a revolution under the radar of many government statistics. In their latest work, “The Second Machine Age,” Brynjolfsson and McAfee state that "something huge is happening, and the figures aren’t capturing it."

This "something" is innovation driven by information technologies, they say. And we're only at the beginning of this transformative era. The innovation isn't in the machines themselves, but, rather, the new discoveries and types of business built on top of them. Digital technologies are “general purpose technologies like steam power and electricity. They’re pervasive, improving over time, and able to spawn new innovations.”

New developments arising out of the digital realm since 2004 include 3D printing, driverless cars, cloud-based global supply chains, muscular exoskeletons, and intuitive, game-show winning supercomputers.

(Thumbnail photo: US National Archives.)

This post was originally published on Smartplanet.com