January 18th, 2013
12:08 PM ET

What we're reading

By Fareed Zakaria

In the 1970s, U.S. “growth in real output per person dropped from its post-World War II peak of over 3 percent a year to just over 2 percent a year,” The Economist noted last week. In the 2000s it dropped below 1 percent. Have innovation and technology stopped driving growth?

The theory has been gaining ground, but may be misplaced, the magazine says:

“Across the economy as a whole productivity did slow in 2005 and 2006 – but productivity growth in manufacturing fared better. The global financial crisis and its aftermath make more recent data hard to interpret. As for the strong productivity growth in the late 1990s, it may have been premature to see it as the effect of information technology making all sorts of sectors more productive. It now looks as though it was driven just by the industries actually making the computers, mobile phones and the like.”

Could California see an oil boom? The U.S. Energy Information Administration estimates the Monterey shale field alone “holds 15.4 billion barrels of oil, rivaling America’s total conventional reserves,” notes Mark Mills in the Wall Street Journal.

“The overall economic benefits of opening up the Monterey shale field could reach $1 trillion. One can only imagine the impact on California's education system, social programs, infrastructure, and even energy-tech R&D. Moreover, with that kind of revenue, Sacramento tax collections could wipe out debt and deficits.”

And how should the U.S. respond to unfolding events in Mali? The question is complicated by a lack of clear information on the ground.

“[S]urveillance missions in northern Mali have had only a limited effect. Islamist leaders have cracked down on some electronic communications and been careful not to reveal pieces of sensitive information that could be monitored, like their exact positions,” the New York Times reports.

“General Ham said that it had been very difficult to get consistent, reliable intelligence about what he called a militant ‘safe haven’ in Mali...‘It’s tough to penetrate,’ he said. ‘It’s tough to get access for platforms that can collect. It’s an extraordinarily tough environment for human intelligence, not just ours but the neighboring countries as well.’”

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soundoff (5 Responses)
  1. joe anon 1

    western capitalist life is but a treadmill.
    keep running even though you are going nowhere.
    keep running to stay ahead of your disasters.
    keep running because you have made life pointless.
    old glory land: we turn gold into rust the rust into cheap tin and charge gold for it.

    January 19, 2013 at 1:12 pm | Reply
  2. GEORGE ARGIRIOU

    I could not find an article about the attempted murder of the leader of the turkish party in boulgaria.So i will talk here.From the video and the status of the area the thing is simple.First the would be killer looks like and is russian.Second turkey wants to activate a would be line of turkysh people at the south of europe inclounding greece and maybe albania and former republic of macegonia and ofcource bulgaria.So if you compaine these things you understand that there is no way this line will exist ever.

    January 19, 2013 at 6:32 pm | Reply
  3. GEORGE ARGIRIOU

    Parts of these countries of course.

    January 19, 2013 at 6:45 pm | Reply
  4. GEORGE ARGIRIOU

    Of course all this area is closely watched by many forces and things are under control in every way.

    January 19, 2013 at 6:50 pm | Reply
  5. Ray Attiyah

    Fareed,

    One major reason manufacturing productivity increased during the 2005 & 2006 year is growth in demand of mature products. The availability to credit & housing boom provided an opportunity for many to go out an buy buy buy. New pick-up truck, boat, couch, TVs, homes, homes, and homes. These required more of the same "stuff" to be made. Innovation of new products and technology were not needed to increase revenues. Increasing productivity is simpler when making more of the same product and mature products.

    Innovation and technology investments became a priority in late 2008 and througout 2009 once revenues began to decline. Unfortunately, the pipeline of new ideas was scarce in many organizations.

    Two reasons –
    1. Managers measured progress only by revenues and profits rather than relevance and bold innovations. It was easier to be safe with a known success than make investments in the unknown.
    2. During the growth in 2004-2008, managers were sucked in the running of the business rather than on new growth initiatives. The urgent trumped the important. It required courage to allocate time and resources on the new ideas when most people didn't see the immediate need.

    I hope we learn from this during the next boom. Be bold and fearless

    January 20, 2013 at 12:48 am | Reply

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