software as capital

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Sun Aug 29 09:14:20 PDT 1999


Just would like to note that in The Rise of the Network Society, Manuel Castells subjects Robt Gordon like arguments about slow productivity growth to criticism. He notes

Castells argues that the slowdown of productivity has been concentrated in the so called service sector. Then he notes

*the difficulty of measuring productivity in so called services. According tohe BLS productivity in banking has only improved by 2% a year. This seems to be a fantastic underestimate. Well since growth in real output is *defined* as the increase of hours worked in the industry, productivity growth is eliminated by assumption. *while productivity has not grown in services esp. for those countries in which retail employment has a great weight, e.g. US and Japan, some service industries as conventionally defined have displayed great increases in productivity, e.g., telecommunications, air transportation, , and railroads. Indeed where retail employment is relatively insiginficant, as in France and Germany, there has been substantial productivity growth. *mfg productivity growth rates have often reached so called Golden Age levels, esp. Japan, the US and to a lesser extent UK, suggesting that they have indeed assimilated new technologies (CAD, CAM) at a faster rate than France and Germany.

Yours, Rakesh



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