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The Productivity Paradox: What Is It And How Can We Move Beyond It?

The Productivity Paradox: What Is It And How Can We Move Beyond It?

It’s a depressing adage we’ve all heard time and time again: An increase in technology does not necessarily translate to an increase in productivity.

Put another way by Robert Solow, a Nobel laureate in economics,

“You can see the computer age everywhere but in the productivity statistics.”

In other words, just because our computers are getting faster, that doesn’t mean that that we will have an equivalent leap in productivity. In fact, the opposite may be true!

New York Times writer Matt Richel wrote in an article for the paper back in 2008 that stated, “Statistical and anecdotal evidence mounts that the same technology tools that have led to improvements in productivity can be counterproductive if overused.”

There’s a strange paradox when it comes to productivity. Rather than an exponential curve, our productivity will eventually reach a plateau, even with advances in technology.

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So what does that mean for our personal levels of productivity? And what does this mean for our economy as a whole? Here’s what you should know about the productivity paradox, its causes, and what possible solutions we may have to combat it.

What is the productivity paradox?

There is a discrepancy between the investment in IT growth and the national level of productivity and productive output. The term “productivity paradox” became popularized after being used in the title of a 1993 paper by MIT’s Erik Brynjolfsson, a Professor of Management at the MIT Sloan School of Management, and the Director of the MIT Center for Digital Business.

In his paper, Brynjolfsson argued that while there doesn’t seem to be a direct, measurable correlation between improvements in IT and improvements in output, this might be more of a reflection on how productive output is measured and tracked.[1]

He wrote in his conclusion:

“Intangibles such as better responsiveness to customers and increased coordination with suppliers do not always increase the amount or even intrinsic quality of output, but they do help make sure it arrives at the right time, at the right place, with the right attributes for each customer.

Just as managers look beyond “productivity” for some of the benefits of IT, so must researchers be prepared to look beyond conventional productivity measurement techniques.”

How do we measure productivity anyway?

And this brings up a good point. How exactly is productivity measured?

In the case of the US Bureau of Labor Statistics, productivity gain is measured as the percentage change in gross domestic product per hour of labor.

But other publications such as US Today, argue that this is not the best way to track productivity, and instead use something called Total Factor Productivity (TFP). According to US Today, TFP “examines revenue per employee after subtracting productivity improvements that result from increases in capital assets, under the assumption that an investment in modern plants, equipment and technology automatically improves productivity.”[2]

In other words, this method weighs productivity changes by how much improvement there is since the last time productivity stats were gathered.

But if we can’t even agree on the best way to track productivity, then how can we know for certain if we’ve entered the productivity paradox?

Possible causes of the productivity paradox

Brynjolfsson argued that there are four probable causes for the paradox:

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  • Mis-measurement – The gains are real but our current measures miss them.
  • Redistribution – There are private gains, but they come at the expense of other firms and individuals, leaving little net gain.
  • Time lags – The gains take a long time to show up.
  • Mismanagement – There are no gains because of the unusual difficulties in managing IT or information itself.

There seems to be some evidence to support the mis-measurement theory as shown above. Another promising candidate is the time lag, which is supported by the work of Paul David, an economist at Oxford University.

According to an article in The Economist, his research has shown that productivity growth did not accelerate until 40 years after the introduction of electric power in the early 1880s.[3] This was partly because it took until 1920 for at least half of American industrial machinery to be powered by electricity.”

Therefore, he argues, we won’t see major leaps in productivity until both the US and major global powers have all reached at least a 50% penetration rate for computer use. The US only hit that mark a decade ago, and many other countries are far behind that level of growth.

The paradox and the recession

The productivity paradox has another effect on the recession economy. According to Neil Irwin,[4]

“Sky-high productivity has meant that business output has barely declined, making it less necessary to hire back laid-off workers…businesses are producing only 3 percent fewer goods and services than they were at the end of 2007, yet Americans are working nearly 10 percent fewer hours because of a mix of layoffs and cutbacks in the workweek.”

This means that more and more companies are trying to do less with more, and that means squeezing two or three people’s worth of work from a single employee in some cases.

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According to Irwin, “workers, frightened for their job security, squeezed more productivity out of every hour [in 2010].”

Looking forward

A recent article on Slate puts it all into perspective with one succinct observation:

“Perhaps the Internet is just not as revolutionary as we think it is. Sure, people might derive endless pleasure from it—its tendency to improve people’s quality of life is undeniable. And sure, it might have revolutionized how we find, buy, and sell goods and services. But that still does not necessarily mean it is as transformative of an economy as, say, railroads were.”

Still, Brynjolfsson argues that mismeasurement of productivity can really skew the results of people studying the paradox, perhaps more than any other factor.

“Because you and I stopped buying CDs, the music industry has shrunk, according to revenues and GDP. But we’re not listening to less music. There’s more music consumed than before.

On paper, the way GDP is calculated, the music industry is disappearing, but in reality it’s not disappearing. It is disappearing in revenue. It is not disappearing in terms of what you should care about, which is music.”

Perhaps the paradox isn’t a death sentence for our productivity after all. Only time (and perhaps improved measuring techniques) will tell.

Featured photo credit: Pexels via pexels.com

Reference

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Tucker Cummings

Writer and social media professional sharing productivity tips on Lifehack.

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Last Updated on August 19, 2019

How to Succeed in Life on Your Own Terms: 7 Essential Steps

How to Succeed in Life on Your Own Terms: 7 Essential Steps

There is a great deal of advice in the world telling us how to succeed in life, but often we are given advice that isn’t tailored to our needs, desires and priorities. Success means different things to each of us, and living a life that feels genuinely successful to me might be very different to your idea of a successful life.

Naturally, when we follow the advice of someone else, which is tailored to their life goals and personality, we can end up with something that doesn’t deliver on the promise. We don’t get rewarded with our vision of success: we get theirs.

This is why I’m a proponent of self-discovery, introspection and personal sovereignty. So how to succeed on your own terms?

These 7 essential steps are not going to tell you exactly what to do, but they will provide you with the tools and the questions to ask so that you can discover your own path, so you know how to succeed in life on your own terms.

1. Know Thyself

One of Socrates’ most well-known quotes is,

An unexamined life is not worth living.

I argue that an unexamined life is not a successful one. Self-knowledge is something we could dedicate our lives to, but I’m not suggesting you sit around and navel-gaze in order to find happiness and meaning.

Thankfully, there are people who have created techniques and systems that less us fast-forward through a lot of personal philosophizing, and quickly identify some key aspects of what makes us, us.

You might want to find out what your ideal daily schedule is,[1] and you can take tests that reveal just that. Or you might want to figure out what you need to get things done – and yes, there’s a quiz for that too.

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None of these tests are infallible, and some are more scientific than others, but the process of asking yourself questions about your behaviors and traits is invaluable when it comes to determining your path to succeed in life.

For example, if you know you are an introvert and are unhappy in your current workplace, it might be worth considering why that is (an open plan office space perhaps) and what you would prefer.

It’s these little questions that will provoke answers in you that can guide the decisions that truly improve your life now and in the future.

2. Figure out What Matters to You

What lights you up? This is a question that often gets forgotten as we age. A fortunate child will be given the stimulation they desire in the form of bright toys, affection and entertainment. Little by little, the things that bring a child joy get replaced by what society demands on their behalf.

When we return to that question, and ask ourselves what really matters and what brings us joy, we can move closer towards a successful life. It can help to think back to your childhood, and the times in your life when you were in what Mihaly Csikszentmihalyi calls a flow state.[2]

In a state of flow, time slows and our focus is directed like a laser. We are fully present.

Whilst not everything in life that matters to you will conjure up a flow state, it’s a good indication of the kind of activities and experiences you can try to incorporate into your life on a regular basis.

A successful life is made up of moments like this, and when you know what matters to you and brings you a sense of joy and purpose, you can go about creating more of that.

3. Play to Your Strengths

Why spend your time only on mitigating your weaknesses, only to feel average? Instead, playing to your strengths and amplifying those skills and qualities you already have will help you go from average to extraordinary.

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If you’re great at big picture thinking and love dreaming up new ideas, but often lack attention to detail, acknowledge that. Then instead of trying to improve your analytical skills, focus instead on developing your existing skills of imagination and insight. When you need someone with a keen eye for detail, you can collaborate with those people.

Jackson Pollock was an extreme introvert, with no real desire to get his artwork in front of people. Fortunately, he had Clement Greenberg, who was much further towards the extrovert end of the spectrum, to popularize his work and get Pollock the publicity he needed.[3]

Start by identifying your strengths and what comes naturally to you. Then work on developing those and becoming known for those strengths. You can always find someone who will help you in fill in the gaps.

4. Listen to Yourself

It isn’t always clear to us that we’re on a path that leads us to failure or to success. People can spends decades in a job that is unfulfilling and slowly breaking their spirit, without even realizing it – until it’s too late. This is usually because they haven’t learned how to truly listen to themselves.

The challenge we face is that we’re listening to so many other sources of information; whether it’s the news, television, social media, family, friends or colleagues. Many may want to help, but that doesn’t mean they know what’s best for us. Only you know what success means for you, and working this out begins with listening to yourself.

Listening to yourself requires practice. It’s a daily effort, which over time, does get easier. That inner voice of wisdom will get clearer, and the decisions you make will feel more convincing.

To start, you could try to set aside 10 to 15 minutes when you first wake up, in silence. Rather than look at your phone, checking emails or social media, simply sit in silence, listening.

Ask yourself a simple question like, what am I feeling right now, in this moment? Notice the answer that bubbles up, without getting lost in the story. Starting an inner dialogue, without judgment is one of the key tools you can use to start making better decisions in your life.

Learn more about listening to your true self in this guide: How to Listen to Your Inner Voice for Greater Fulfillment

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5. Listen to Others (But Not Everyone)

Listening to yourself is one thing, but listening to others is crucial in order to learn, empathize and be of benefit to your community.

Truly listening to others is not just waiting patiently until it’s your turn to speak. Active listening requires focused attention, and the intention to understand where the other person is coming from.

When you do this, you can ask better questions and discover more about the world and everyone in it, as well as learn how to interact with others in order to succeed in life on your own terms.

However, this doesn’t mean you have to listen to everyone you come across. Trolls on the internet may come into the category of people not to listen to. Some people’s opinions will do more harm than good, as not everyone has your best interest in mind.

It’s worth identifying a shortlist of people whose opinions you will listen to. Brené Brown, author of the New York Times best-seller Daring Greatly, recommends taking a 1-inch x 1-inch square of paper and make a list of people whose opinions matter to you. These are the people who love you and will genuinely support and help you. According to Brown,

“If you need more paper, you need to edit.”

6. Make Time for Reflection

It’s easy to go through life without taking inventory of what you’re actually accomplishing. Missing this crucial step means we end up jumping from one goal to the next, without feeling like we’re getting anywhere.

Make time, ideally each day to reflect. You might keep a paper journal, or an online document. Either way, jot down:

  • What went well today
  • Something you’re grateful for
  • What would make tomorrow even better

Doing this can have measurable benefits to our overall sense of well-being, as well as keeping us focused for more success in the future.[4]

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It also helps combat feelings of lack and doubt, that arise when we compare ourselves to others. When we look at someone who appears to be more successful than us in an area of life, we can forget how far we’ve come and how much we have to be grateful for.

Making time to reflect on what you have accomplished is critical to keep you on track, and just not looking at what others are doing.

7. Don’t Be Afraid to Change Your Mind

Arguably the most important step of all:

Remember that there’s nothing wrong in changing your mind and correcting course.

The path to a successful life is not straight and narrow. It meanders and there’s no harm in going back and picking a different (and better) route.

“I think our life is a journey, and we make mistakes, and it’s how we learn from those mistakes and rebound from those mistakes that sets us on the path that we’re meant to be on.” — Jay Ellis

Be willing to make mistakes, learn from them and change your mind. Ultimately, there’s no better way to succeed in life on your own terms.

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Featured photo credit: Shirly Niv Marton via unsplash.com

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