Total factor productivity is, roughly, the increase in productivity due to technological progress. The BLS reported today that it rose 0.7% in 2023:
This is right at the average of the past five years and slightly below the average since 2000. In other words, kind of meh.
I have a feeling that we're in a period like the '40s and the '80s right now, where there's been a lot of technological progress but it hasn't quite turned into productivity. It was pent up in the '40s by the Great Depression and World War II and in the '80s by the time it took to truly integrate the PC revolution into business practices. Eventually, in the '50s and the '90s, the pent-up change broke through and we saw some real progress.
Maybe we're still a few years away from that. I don't know. But my instinct tells me that AI, communications, biotech, energy production, and a few other things have been gaining steam and will soon turn into serious progress on the ground. Just a guess, though.
The real revolution, I think, was the invention of the transistor. That fueled the electronics revolution.
It's too late to make a comment anyone will see, but here's one anyway: I'm not disagreeing with Kevin's comments, but it seems to me that from the mid-1970s on management has crippled improvements in productivity. (Unless outsourcing to China and Mexico counts.)
First companies were taken over by bean-counters who demanded cuts in inventory and stood in the way of most investments. (GE decided not to put CFLs on the market in the 1970s because they'd have to spend $25million on a new plant and it would hurt incandescent bulb sales.)
Then the companies were taken over by outsiders who stood to make quick personal fortunes by juicing the stock. (Jack Welch at GE and his copiers who are everywhere...Boeing for example.) They juice the stock with actions that sound good to the institutional investors, but that often cripple or kill the organization down the road.
Then the fellows at the top filled the thinned out middle management ranks with people polishing resumes with big projects (that usually failed).
I could put a few thousand words into describing the business destroying edicts of these kinds of people that I've personally observed, but I bet most of the followers of Kevin have seem them with their own eyes.