To the Coders Go the Spoils

For any student of economics or technology, John Cassidy has an interesting piece out this week asking where have all the promised productivity gains of the digital era gone? One look at the data and it’s hard not to share his disappointment. The late 90s saw a boom in productivity as the web revolution blossomed and output per hour grew by 2.75 percent. Productivity growth continued even after the dotcom crash, growing 3.5 percent through 2004. This was an era of globalization and a rapidly expanding financial sector, but computing and the technology industry played no small part.

Turn to today and Cassidy’s mood is bleak, though he is unlikely to be alone. The great recession has put millions out of work and seemingly stamped out any hope of returning to the productivity growth seen at the turn of the millennium. The iPads and Facebooks that we have invented, while marvels of engineering and creativity, have so far failed to ignite a second industrial revolution (or fourth, if you read this fascinating, but “glass-half-full” paper by Robert Gordon) that was once promised to us. Oh digital era, why hast thou forsaken us?

Cassidy meekly puts an important caveat to these arguments: the true economic impact will come, but it just takes time. Just like the steam engine took a half-century before its potential was finally realized, Cassidy concedes that we may simply be in the slow part of the impact curve for these technologies. What he fails to understand is exactly why: literacy.

Read long and prosper

There have been countless studies showing that literacy is a powerful predictor of economic growth and dynamism. It allows for the transfer of information across cultures and generations, and for the acquisition of new skills to make a workforce more productive. In eras of great economic upheaval, literacy is often the determinant of whether an individual is able to adapt and prepare themselves for the economy of the future. Those who find themselves in such a position accrue a disproportionate share of the benefits of new technologies and techniques – often as societies are forced to design social programs to help the masses catch-up.

In the industrial revolution era, improving literacy allowed for the more rapid dissemination and adoption of the steam engine technologies by the most daring entrepreneurs, who were able to find new, productivity-enhancing ways to harness its power. Yet the true enhancements only came when these machines were able to spur production en masse – which required a level of technical and linguistic literacy on the part of the broader population that did not exist until years later.

In the “technological revolution”, Robert Gordon’s term for a period roughly at the turn of the 20th century, new levels of scientific literacy brought forward applications for electricity, internal combustion and new chemicals and alloys. Yet again, this revolution was only made possible once the average worker achieved sufficient scientific literacy to manufacture these new products and the technical literacy necessary to implement new management techniques like the assembly line.

Even the more recent “information revolution”, which started with just a few brainy and bored scientists developing new methods for interacting with machines and one another, shows a similar trend. From those first few garages the personal computer was born, but was at the time dismissed by the technology titans of the time.  It was only when basic computer literacy rose and it became clear that the personal computer could transform countless common tasks that productivity truly increased.

Literacy, whether it is linguistic, scientific or numeric, has served as the catalyst for taking invention to mass adoption and delivering on the promise of productivity, growth and prosperity. While it may not yet be obvious, the current era will be no different.

The “Computing Revolution”

It is no stretch to suggest that the next revolution will come from our great capacity for computing. “Big data” and “hackathons” may still be buzzwords best suited to blogs or tech conferences, but they’re at the forefront of a revolution every bit as powerful as those before it. The potential is obvious: every individual has at their fingertips incredible, inexpensive computational power that was unthinkable only years ago, with languages and infrastructure that has immeasurably shortened the potential time from initial idea to product prototype. The time it takes to build an app or program that solves a particular challenge can now be measured in hours, not days or weeks.

This revolution would have already changed how we work, how we innovate and even how we live were it not for one crucial missing ingredient: literacy.

As Brad Smith of Microsoft outlined in his October essay to the Wall Street Journal, there is an enormous gap between the number of jobs requiring programming literacy and those who have the skillset (his statistics are for the U.S., but the lessons ring true for Canada and countless other nations as well). Just as was the case with revolutions of the past, this has proved a boon for those who do possess the skills, with your average computer engineer making multiples of the average national salary. With a supply of talent so incapable of keeping up with demand – more than 3,000 unfilled positions at Microsoft as of Smith’s writing alone – it’s no wonder that the process of innovation and productivity enhancement has slowed.

Moreover, the dearth of talent is felt well beyond what many would consider “high technology companies”. For example, advanced manufacturing increasingly requires employees to understand the code behind the machines they’re using. Just as previous generations used their technical literacy to reorganize and enhance production line systems, these new generations of workers can manipulate through programming the tools of the modern production line to be quicker, more efficient and ultimately, more productive.

Even in our own day to day lives, we are forced to conform to imperfect interfaces when interacting with computers, ill-suited to our particular needs and tasks. True, new forms of customization have become increasingly accessible – see the success of more modular platforms like Android – but the greatest explosion of productivity enhancements will come when individuals no longer need to wait for the market to offer a sub-optimal (and expensive) solution but can themselves program solutions to their own day-to-day challenges.

As Mr Cassidy notes, the tools are ready and waiting. All that’s needed now – in fact, all that’s ever been needed – is a little bit of literacy.

Tory Jarmain is the co-founder of Bitmaker Labs, a Toronto-based start-up that teaches students to become a web developer in 9 weeks. Will Meneray is a part-time blogger on Bitmaker’s “Bits and Bytes” blog. Both are graduates from the Richard Ivey School of Business in London, Ontario.