Beyond The Rainbow

Innovation is unlikely to support “future economic growth,” writes Robert J. Gordon in The Wall Street Journal (12/22/12). Robert is a Northwestern University professor and author of a forthcoming book, Beyond The Rainbow. His basic argument is that the past century’s growth “resulted from a remarkable set of inventions between 1875 and 1900,” beginning with “Edison’s electric light bulb (1879) and power station (1882), making possible everything from elevator buildings to consumer appliances. Karl Benz invented the first workable internal-combustion engine the same year as Edison’s light bulb.”

The same time frame saw “the introduction of running water and indoor plumbing … The telephone, phonograph, motion picture and radio also sprang into existence.” Post World War II witnessed “the development of television, air conditioning, the jet plane and the interstate highway system.” As Robert writes: “This profound boost that these innovations gave to economic growth would be difficult to repeat.” For example: “Only once could transport be increased from the horse (six miles per hour) to the Boeing 707 (550 mph).”

As the effect of such innovations “faded away around 1970, the computer revolution took over and allowed the economy to remain on our historic path of 2 percent annual growth … The climax was the marriage of communications to the computer as the internet arose in the 1990s … Since 2002, though, most computer-related inventions have resulted not in fundamental transformation but in miniaturization,” such as the iPhone. Robert says his pessimism is not “a failure of imagination” on his part, noting he is “not forecasting an end to innovation, just a decline in the usefulness of future inventions in comparison with the great inventions of the past.”