Software as a general purpose technology. Think twice

Here is an interesting reflection1, on a “generally” overlooked question…

General-purpose technology is the name economists use for technologies that create broad-based productivity growth (which by the way is not growing).

GPTs can flatten complexity. A strong, cheap structural material eliminates the need for complicated designs in new applications. Inexpensive energy sources reduce the need to increase efficiency. Brute force can prevail.

A computer sure looks like a General Purpose Technology. It is magic technology that almost anyone can use to message Grandma or learn incredible amounts of information. However…

A closer look shows that the GPT aspects are shallow. For software to increase TFP, it has to mimic human tasks in great detail. Writing software starts like implementing any management system – defining and reimagining processes.

Software is (Mostly) a Management Technology.

Using software to operate our economic processes means putting huge portions of complex human life into code. While software improves through better tooling and faster hardware, the problems left to solve have steeply increasing complexity to reward ratios.

And “management techniques” are fiendishly difficult to adopt… Unless you are Elon Musk, of course, the guy who’s going to solve General Artificial Intelligence “sometime next year.”

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(1) Austin Vernon, Why Doesn’t Software Show Up in Productivity?

Featured Image. Tesla Bot Presentation

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