Neither history, nor the present-day pace of scientific discovery supports the notion of diminishing returns to technological innovation. The challenge for growth economists is that analytic models are poorly suited to capture, and set society’s expectations for, these impending disruptions. Some consequences will be too pervasive and long-term to show up clearly in the immediate data. Some will change our behaviours, and by doing so invalidate prevailing economic assumptions. And some will transcend the economic sphere entirely to touch higher human values.
Growth economics is powerful. At its best, it is an empirical science that helps determine how to lift human wellbeing – one of civilisation’s most important tasks. But it is unable to capture the dynamism of our new age of discovery for a reason. Much that matters is still beyond its sight.The authors argue in the post that big changes are in the works and that a this will result in a paradigm shift. Pessimism in growth economics is unwarranted pessimistic.
Complex adaptive systems are characterized by emergence, which implies surprise. While specific surprises remain unknown unknowns, there is a pattern of known unknowns that is developing that suggests big transformations lie ahead sparked by technological innovation already underway.
Advanced economies’ progress: Dismal and dazzling
Ian Goldin, Professor of Globalisation and Development, University of Oxford, and Chris Kutarna. Fellow, Oxford Martin School, University of Oxford