Table: Economists vs. Technology
The economics profession, for the most part, underestimates the importance of technological change. Out of 53 economists who have won the Nobel prize, only four were honored for research on technology or innovation. And only 7% of the sessions at the January, 2004, annual meeting of the American Economics Assn. were devoted to the economic impact of technology.
Many economists are skeptics when it comes to technology-driven growth, downplaying the role of technological change in their textbooks and policy pronouncements. They emphasize reducing the budget deficit, boosting savings, and changing the tax system rather than policy measures to boost innovation. Here's what some leading economists have written:
Alan Blinder, Princeton economist and former vice-chairman of the Federal Reserve:
"Nothing -- I repeat, nothing -- economists know about growth gives us a recipe for adding a percentage point or more to the nation's growth rate on a sustained basis." (1997)
"The notion that we are spending far too small a share of GDP on innovation is not really very plausible." (2003)*
Martin Feldstein, Harvard economist and current president of the American Economics Assn.:
"Increased capital accumulation...was the only determinant of growth that seemed susceptible to changes in economic policy." (1994)
"Even if the technical changes in information technology had not occurred, the pressures to raise profits and reduce costs would have led to a greater increase in productivity in the U.S." (2003)
Paul Krugman, Princeton economist and New York Times columnist:
"High technology is fashionable, and I think we are all obliged to make a deliberate effort to fight against fashionable ideas." (1991)
"Technology is not a magic elixir. The Internet, mobile phones, and all those things are exciting and important, but those who count on them to solve all their problems are likely to be disappointed." (2000)
N. Gregory Mankiw, Harvard economist and current chairman of the Council of Economic Advisers:
"While the productivity speed-up is a fortuitous development, its importance should not be overstated." (2002)
"The sources of strong productivity growth are hard to identify." (2003)
* From Economics: Principles and Policy, his textbook co-authored with William Baumol.