A couple of months ago I listened to a Planet Money podcast discussing the mysterious slowdown in US productivity growth (the link is to one of several podcasts on this topic). Like most NPR content, the story got recycled through a number of different programs, such as Morning Edition.
The upshot was, that productivity â€” which is essentially GDP/work â€” has stalled since the â€” I dunno â€” 90s, and it doesn’t make sense given the apparent revolutions in technology â€” faster computers, better networks, etc.
Anyway, the upshot â€” and I’m basing this on memory because I can’t find the exact transcript â€” is that there’s a mysterious hole in productivity growth which, if it were filled, would add up to several trillion dollars worth of lost value added.
Well, I think it’s there to be found, because Free Open Source Software on its own adds up to several trillion dollars worth of stuff that hasn’t been measured by GDP.
Consider the dominant tech platforms of our time â€” Android and iOS. Both are fundamentally built on Open Source. If it weren’t for Open Source, iOS at minimum would have been significantly altered (let’s assume NeXTStep would have had a fully proprietary, but still fundamentally POSIX base) and Android could not have existed at all. Whatever was in their place would have had to pay trillions in licenses.
On a micro level, having worked through a series of tech booms from 1990 to the present â€” in the 90s, to do my job my employer or I had to spend about $2000-5000 for software licenses every year just to keep up-to-date with Photoshop, Director, Illustrator, Acrobat, Strata 3d, 3dsmax, Form*Z, and so on and so forth. By the mid aughts it was maybe $1000 per year and the software was So. Much. Better. Today, it’s probably down to less than $500.
And, in this same period, the number of people doing the kind of work I do, is done by far more people.
That’s just software. This phenomenon is also affecting hardware.
The big problem with this “lost productivity” is that the benefits are chiefly being reaped by billionaires.