Is growth over?

Global growth from the current industrial revolution (computers, the web, mobile phones) is slowing — especially in advanced-technology economies, and long-term economic growth may grind to a halt, Robert J. Gordon, Stanley G. Harris Professor in the Social Sciences and Professor of Economics at Northwestern University, has argued.

Growth in real GDP per capita, with actual (from .2 to 2.5 percent per year) and hypothetical paths (credit: Robert J. Gordon)

Growth in real GDP per capita, with actual (from .2 to 2.5 percent per year) and hypothetical paths (credit: Robert J. Gordon)

Now economist Paul Krugman counters in The New York Times that we are moving toward a world in which:

Big Data — the use of huge databases of things like spoken conversations — apparently makes it possible for machines to perform tasks that even a few years ago were really only possible for people. Speech recognition is still imperfect, but vastly better than it was and improving rapidly, not because we’ve managed to emulate human understanding but because we’ve found data-intensive ways of interpreting speech in a very non-human way.

However, he warns, while smart machines may make higher GDP possible,

they also reduce the demand for people — including smart people. So we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots.

What about taking into account the effects of future exponential growth of hardware and software computation and technological singularity?

The new mayor? A Computer.

Your Next Mayor? A Computer.

Our planet is becoming smarter, and this isn’t just a metaphor.

Three years ago, 100 Parisians volunteered to wear a wristband with a sensor in it. The sensors measured air and noise pollution as the wearers made their way around the city, transmitting that data back to an online platform that created a virtual map of the city’s pollution levels, which anyone with an Internet connection could take a look at.

This was a peek at an urban future when “smart cities” will collect data of all kinds (in all kinds of ways) and use it to make themselves better places to live. With the market projected to be worth $16 billion by the end of the decade, big companies like IBM and Cisco have much grander — and more profitable — ambitions: they’re going all-in on smart cities, with designs that supposedly do everything from end traffic jams to prevent disease outbreaks to eliminate litter.

As IBM Chairman Samuel J. Palmisano said at the 2010 SmarterCities forum in Shanghai:

Computational power is being put into things we wouldn’t recognize as computers. Indeed, almost anything—any person, any object, any process or any service, for any organization, large or small—can become digitally aware and networked.

Think about the prospect of a trillion connected and instrumented things—cars, appliances, cameras, roadways, pipelines… even pharmaceuticals and livestock.

And then think about the amount of information produced by the interaction of all those things. It will be unprecedented.