Robert D. Atkinson will be presenting/speaking at an event hosted by Boeing "Leading and Nurturing a High Tech Enterprise" in St. Louis, MO.
How Can We Boost Productivity?
In response to query on National Journal’s expert blogs feature on productivity, ITIF President Rob Atkinson explains that Washington policy makers devote too little attention to boosting productivity. With the baby boom generation retiring, productivity will be an important element in raising incomes and financing government in the years ahead. What is needed is a fresh approach to thinking about productivity. Contrary to conventional wisdom, government action can spur private sector productivity gains.
Viewpoints: Bill Would Shield Unions, Not Children
In this Sacromento Bee op-ed Senior Analyst Daniel Castro explains how recent efforts in the California legislature to ban self-checkouts at grocery stores because they promote underage drinking are really more about protecting union jobs at the expense of innovation than about protecting children.
Embracing the Self-Service Economy
The past decade has witnessed a rapid growth in self service that allows consumers to take on the traditional role of a service worker in the provision of a service. Self service has long existed—think of placing a call by dialing a telephone instead of using a telephone operator or pressing a button in an elevator instead of using an elevator operator—but its importance has grown as advances in information technology (IT) have created many opportunities to leverage self-service technology for large gains in efficiency and convenience. Using computer kiosks, airline travelers check in to their flights; on the Internet, consumers purchase products without ever speaking to a sales agent; and, using a mobile phone, customers check their bank balances and transfer funds. Self-service technology continues to become more efficient and more convenient, and, as a result, increasingly organizations, including businesses, non-profits and governments, are using self-service technology to operate more productively and to better serve their customers.
Self-service technology has already transformed entire industries, from ATMs in banking to e-commerce in the travel industry, resulting in significant savings for businesses which are passed on to consumers in the form of lower prices and better service. However, even though self-service technology has generated a wide range of benefits and savings for consumers, businesses, and government, it is only the beginning. Over at least the next decade, self-service technology has the potential to be a major force for growth in productivity and improvements in quality of life. We estimate that if self-service technology were more widely deployed, the U.S. economy would be approximately $130 billion larger annually, the equivalent of an additional $1,100 in annual income for every household.
These savings could not be coming at a more crucial time. Most national economies will need the power of self-service technologies if they are to avoid serious economic problems stemming from significant growth in the number of retirees, a situation that will be particularly acute in Europe, Japan, and the United States. In the United States, for example, the number of retirees for every 1,000 working age adults is projected to grow from 213 today to 346 by 2030. For Social Security recipients in 2030 to not see a decline in their inflation-adjusted payments without workers seeing a decline in their after-tax incomes, economic productivity will have to increase by 62 percent. Unfortunately, the Social Security Administration estimates productivity will grow just 40 percent. As a result, in 2030, either worker incomes after Social Security taxes are deducted will be significantly lower, or Social Security benefits will be lower, or both. Self-service technologies promise to be a major source of needed productivity growth, enabling the United States, Japan, Europe, and other nations facing demographic challenges to realize such growth without reductions in wages or benefits.
But these benefits will not automatically occur unless the right policies are in place and the wrong ones are avoided. First, governments should avoid putting in place restrictions on self-service business models and processes. This means that policymakers must resist the efforts of special interest groups that press for restrictions in technology to protect their economic or social interests at the expense of the average citizen. Second, where appropriate, governments should proactively promote self-service delivery of government services. For example, governments should pass along to citizens the savings from using lower-cost self-service options. Governments should also help create a climate conducive to expansion of self-service technologies. This means that government should support the development and deployment of technologies that enable self-service, like broadband, electronic IDs, and mobile payment systems. In the United States in particular, Congress should increase the minimum wage thereby providing firms with more incentive to invest in self-service technology, while at the same time helping to boost the incomes of low income Americans. In addition, Congress should establish an academic Center of Excellence to develop best practices for accessible design for self-service technology. Finally, we recommend that policymakers establish stronger safety nets for workers adversely affected by technological change so that the workforce can more easily adapt to a rapidly changing economy.
Self-service technology offers a broad set of benefits to consumers and businesses and has the potential to contribute even more to our national prosperity and quality of life. While self-service technology is widespread, it is still relatively new and will only continue to improve in quality over time. However, policymakers must avoid enacting policies to restrict self-service while at the same time putting in place appropriate policies to stimulate the self-service economy to realize these benefits.