Economists Say Moore's Law May Finally Be Paying Off
Laura Peters, Senior Editor -- Semiconductor International, 11/1/2000
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If true, it has taken the computer industry decades to improve worker productivity based on an unparalleled technical phenomenon - the ability to shrink device dimensions by 10% per year, creating a new generation of chips every three years with four times the computing power for the same cost. By its nature, one would expect Moore's Law to significantly impact the U.S. and global economies - especially in a world increasingly dependent on electronics, wireless communication and multimedia entertainment.
It was while searching the Internet for details surrounding Jack Kilby's receipt of the Nobel Prize for the 1958 invention of the integrated circuit that I linked to an article titled "The End of Moore's Law?" by Charles C. Mann in the May/June 2000 issue of MIT's Technology Review (www.techreview.com). The piece described a "productivity paradox" between the massive investment in computers and an associated lack of apparent economic advantages measured in products (or services) produced per capita. Mann quotes Robert M. Solow, a Nobel Prize-winning economist as saying in 1987, "We see the computer age everywhere except in the productivity statistics."
As unbelievable as this paradox may seem, gross national product (GNP) numbers back it up. Since World War II (and the invention of the transistor in 1948), annual productivity grew by 3% until 1973, followed by years of 1% growth in the 1970s and 1980s, periods of inflation, recession, unemployment and budget deficits, as the article explained.
A turnaround occurred in 1995 when GNP began rising by 2% per year, coincident with a dramatic drop in computer costs. Some economists hypothesize that Moore's Law is finally paying off. One observer commented that it took companies that long to learn how to utilize the technology to best suit their businesses.
In my own experience, computing power is a logical contributor to productivity. Using the Internet, one can simply perform in-depth research on evolution, illnesses, technology, industries, sports, etc. Modern electronics allows individuals to inexpensively produce their own film or publish their own novel. We can download news from various countries that we barely had access to 10 years ago.
At my company (Cahners Business Information), we are eliminating the processing of film and now produce magazines using a completely computerized process. While one might expect this change to immediately increase efficiency, we found the process created a whole new set of issues - temporarily increasing resource allocation while the bugs were being worked out. We now are beginning to realize the productivity benefits.
So if we assume the "productivity paradox" has ended and our population is beginning to realize the economic rewards of computing, the hurdles ahead might be less about Moore's Law (though its continuation is essential), and more about making better use of technology. Then the notable engineers of tomorrow will create applications that go beyond improving lifestyles (i.e., making things easier), to perhaps tackling some of the large worldwide problems such as hunger, illiteracy and other social issues. By shifting focus from the "faster, smaller, cheaper" treadmill long enough to ask, "What is it we really want technology to do?" - we might enter a new period in history where unlimited opportunity serves us in inconceivable ways.
