The Productivity Paradox

The Productivity Paradox

Technological development does not necessarily mean an increase in productivity. On the contrary, there is a decrease in productivity, as the devices become faster and faster.

The term became popular after it was the title of a paperwork written by Professor Erik Brynjolfsson. He argued that although there seems to be no direct and measurable correlation between improving information technology and improving production, it could be more a reflection of how productivity is measured and traced.

A recent survey conducted by Microsoft Corporation shows that new digital technology, under certain circumstances, may lead to stagnating or downgrading productivity. The survey was attended by 20.000 employees in the European Union. This has revealed several situations where employees are distracted. One of them is the continuous flow of emails (especially SPAM or advertisements), application notifications, messages and why not, funny cat videos. Low productivity can also occur in cases where employees are not trained to use the new technology effectively. Let’s not forget the workers who suffer burnout because, with mobile devices and at-home-working, they feel tethered to the job around-the-clock.

But how do we measure productivity? The US Labor Statistics Bureau says productivity is measured as “percentage change in gross domestic product per hour of work”. Of course there are voices who disagree with this view and measure productivity by how much improvement there is since the last time productivity stats were gathered.

The preponderance of evidence suggests that the decline in IT productivity must be treated as credible. Increasing productivity is essential to keep low unit costs and thus to enable businesses to compete successfully on the international stage. Increasing productivity is also a major source of wage increases for the industrial workforce. If firms can produce more, they can afford to pay higher wages.

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