A week before the 1980 presidential
election, Ronald Reagan famously asked
a debate audience “Are you better off
than you were four years ago?” Though
political circumstances change, the
question remains: are we in the U.S.
better off than we were in the past? Can
we expect to be better off in the future?
And, most important for the readers of this
column, what role will design engineers
play in future improvements to the U.S.
standard of living?
Economist Robert J. Gordon has
pondered these questions most of his
life, and has delivered his answers in the
form of a 762-page book called The Rise
and Fall of American Growth: The U.S.
Standard of Living Since the Civil War.
The book confirms something that I have
long suspected, and makes hard-data-based predictions that engineers need to
bear in mind.
Gordon’s basic message is simple. The
period 1940 to 1970 – the economic
golden age when a U.S. citizen with only
a high-school education could get a good
job, marry, have children, and afford a new
house and a new car – was very likely
unique, and will never return. Gordon
judges its uniqueness by a measure he
calls “total factor productivity” or TFP.
You have probably heard of gross
national product, or GNP, which is
basically the total output of a nation’s
goods and services. As I understand it,
TFP is the amount of economic output
for a given input of labor and capital. Any
innovation that lets someone produce
more value (a widget or a service) with
fewer people or fewer dollars invested in
capital equipment will increase TFP. And
a growing TFP is what makes an economy
attractive to live in. It opens up good
employment opportunities, encourages
productive investment, and makes life
easier in general.
As Gordon shows in near-exhaustive
detail, that is just what happened in the
U.S. as the nation shook off the effects
of the Great Depression in its all-out
effort to out-produce the Axis during
World War II. Once the great engines of
production got going during the war, they
managed a smooth transition to making
the peacetime abundance of consumer
goods that characterized the 1950s: cars,
TVs, air conditioning, computers, and all
the rest. But once that wave of innovation
ended, things slowed down again.
To quote data from just one of the
hundreds of graphs and charts in the
book, in the period 1890 to 1920, TFP
in the U.S. rose at an average rate of
0.5 percent a year. From 1920 to 1970,
it sped up to about 1.8 percent a year.
And from 1970 to 2014, TFP fell back
down to only about 0.6 percent per year.
In a numerical nutshell, that is the story
Couldn’t it happen again? Not in
the U.S., Gordon says. Barring some
unanticipated universal disaster, you can
wire a nation for electricity and pipe it
for indoor plumbing and air-condition
its buildings only once. The profound
technological innovations that made
everyday life and work much more
pleasant now than for the preceding
several thousand years took place in
the U.S. largely between 1920 and
1970. It is very hard to imagine any
comparable future innovations that could
make as much of a positive difference
to the everyday lives of most people as
automobiles, clean water, sanitary sewers,
electricity, and air conditioning have made
But what about the rapidly increasing
pace of innovations that design engineers
face every day? Product life cycles that
used to be measured in years are now
measured in months or weeks, which is
why designers are so busy keeping up
with the competition and taking advantage
of new components and software.
Gordon distinguishes sharply between
the pace of innovation, which he admits
is speeding up, and the impact of
and other such
in some industries. But these
have not contributed to TFP nearly as
much as the innovations of the earlier
twentieth century did.
Fortunately, there will always be
something for design engineers to do. But
it may be more along the lines of changes
in style than of fundamental improvements
in the quality of life. Volkswagen’s New
Beetle and Chrysler’s PT Cruiser may be
the shape of things to come: products
that embody forms from the past, but with
updated technology. Up to now, engineers
have rarely thought like dress designers,
who face the perennial problem that there
are only so many ways to clothe the naked
human body, but manage to come up with
new styles every season.
If Gordon is right, the future of
engineering design may look more like
fashion design: a constant reshuffling
of the same basic ingredients. In such a
world, there will always be novel products
for engineers to design. But if Gordon
is right, novelty, rather than fundamental
improvements in the standard of living, will
be the main reason that people buy them.
Do you think the best years of
American economic growth are behind
us, or do you think there will be another
technological advance that
will surpass what happened in the
1940 to 1970 period? Send your
response to email@example.com.