Forecasting Productivity Growth: 2004 to 2024

Conference presentation

The paper, Forecasting Productivity Growth: 2004 to 2024, was presented by John Revesz (Department of Communications, Information Technology and the Arts), at the Productivity Perspectives 2006 conference.

Abstract

Information and communications technology (ICT) will remain the main technological driver of productivity growth in the next twenty years according to this forecasting report.

The report predicts that the strong technological momentum in ICT and its many applications will be maintained in the coming years. Other dynamic technological fields such as biotechnology, nanotechnology and material science will also make a significant contribution to productivity growth but much less so than ICT.

The report indicates that there is 80 per cent chance that GDP per capita will grow at an annual rate of between 1.26 and 1.83 per cent over the forecast period. To achieve the predicted productivity gains it will be necessary to support an appropriate level of investment in ICT skill formation and in ICT related R&D.

Labour productivity growth will be particularly strong in sectors that are heavy users of ICT technologies or are in the process of being transformed into that status. These sectors include telecommunications, manufacturing, finance and trade. By contrast productivity growth in sectors that are less heavily exposed to ICT technologies, such as accommodation and restaurants as well as personal, cultural and recreational services is expected to be relatively low.

The main advances in ICT technologies in the next 20 years will be in ubiquitous computing and communications pervading into all facets of economic life. In particular, greater use will be made of computerised controllers in manufacturing, mining, construction, agricultural and transport equipment in order to increase machine 'intelligence' and multi-functionality and reduce labour requirements.

The continuing rapid advances in ICT and its many applications will help to improve living standards, despite emerging economic problems related to population ageing, environmental pollution and non-renewable energy sources.