Don't be blinded by the web. The world is actually stagnating

If we want to step up the pace of invention, there has to be a huge shift in the way we think

My grandfather grew up in the 1900s in a world of horse-drawn carts and candle-lit houses. In the following 50 years he would live through a series of astonishing transformations – electricity, the motor car, television and radio, the telephone, the refrigerator, the vacuum-cleaner, penicillin and the aeroplane, just to name a few. It was not just these things that made the 20th century what it was. Their production was industrialised. They created huge employment and wealth.

I grew up in the 1960s and have experienced no such parallel transformations. Certainly, over the past 15 years, the mobile phone and internet have changed the way we all communicate. But the world of the early 2010s is recognisably the same as the early 1960s. The technologies have all incrementally advanced but the artefacts of, say, Mad Men are essentially the same, whereas those in, say, Downton Abbey are not. We live broadly as we did 50 years ago.

If this is correct – and it is hard to dispute – then, as US economist Tyler Cowen argues, there are huge economic implications. This is what lies behind what he calls The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. What underpinned the great postwar boom was the industrialisation of inventions made between 1910 and 1940. The goods that poured out of the west’s factories between 1950 and 1975 provided employment and rising real wages for the mass of the US’s and Europe’s citizens.

But the “low-hanging fruit” that delivered such benefits is disappearing, he argues. Productivity advances are not being made in booming new industries; they are being made by laying people off or moving production to low-cost countries in Asia. One way or another, falling workforces in the west are producing broadly the same output. Nor is the internet a great job generator. Google, Apple, Microsoft, Amazon and eBay may be changing the way we read and communicate – but in the US they have created fewer than 100,000 direct jobs. This, argues Cowen, is what lies behind America’s increasingly jobless recoveries and the squeeze on the incomes of its middle-class workers. Our scientists and technologists have not been able to create inventions that can be industrialised at the same pace as they once did.

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