Technology, job creation and productivity

Why doesn't more technology lead to job creation and better productivity?

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Go to the profile of Peter Kraneveld
over 5 years ago

While the question "Why doesn't more technology lead to job creation and better productivity?" is interesting, it doesn't cover the content. From an economic point of view, technology is just correlated with productivity, which is only one element that explains total economic growth in e.g. a Cobb-Douglas production function. Economic growth is in turn correlated with, but not the same as job creation, as the post 2008 world has clearly and painfully shown.

Technology has short-term job-creating and job-destructing aspects. Which aspect will dominate is not just hard to predict, both aspects also play out in time, which makes it even harder to see what the total effect of a certain technology on employment is. In that sense, the question is overly ambitious. Better to stick on the hardest part of the constellation, "productivity explains a significant part of economic growth" and expand from there, step by step.