Attention Economics and the Productivity Paradox
Why productivity did not rise with information technology
Over the last half century, businesses throughout the world have spent trillions of US dollars on computers and related "information technology." The payoff is supposed to be higher productivity; that is more income for the business from a given number of workers working a fixed amount of time. Early in this process, back in the 50's and 60's many social prognosticators began to worry about the vast unemployment or, more hopefully, increases in leisure time that would result. How, they worried, could so much leisure be profitably enjoyed?
They need not have worried, for the vaunted increases in leisure or in productivity have never materialized. Whereas overall productivity grew at almost 3% a year in the 50's, before computers had had much impact, since then, in the US at least growth in productivity has markedly slowed, and more and more time, rather than less and less, is spent officially "at work." Though average family size has shrunk in the intervening years, it now seems to require two full-time workers, rather than only one, to support a middle-class family in a country that in the 50's prided itself on the thought that everyone was or soon would be middle class.
Yet in that time, as we all know, the price of computers has fallen remarkably, while their power has increased fantastically, so that now the average desk-top computer has more computer power and memory than was available in the entire world in 1950. The paradox then is why such a vast increase in computer power on so many worker's desks has not and is not leading even to measurable, much less to huge increases in productivity.
There are many reasons conventional economics has a hard time with this question. For one thing it is not even clear how to measure productivity. If a factory makes a perfectly standard item, say a 60-watt, incandescent light bulb, over and over, year in, year out, productivity is easy to measure. It is simply the total number of light bulbs (or whatever the standard items are) made, per year, divided by the total number of hours worked. But if different items are produced in different years, there is no agreed upon way to compare them. Is a 1999 Volvo S70 equivalent to 1, 2, or 10 and a half 1960 Volvo 544's? Who decides?
Still more difficult to compare are so-called services. Is lawyer in 1999 more productive than a lawyer in the same office several years earlier? The only way to compare is to see how much the later lawyer charges relative to the earlier one, but since lawyers charge basically whatever they can get, this figure has at least as much to do with the demand for lawyers as with the "output" of any particular lawyer.
The example of lawyers is as good as any to demonstrate the advantage of considering the same problem in terms of the transition to a new kind of economy, namely to what I have been calling the attention economy. Not all lawyers charge the same amount. Just as in the case of a movie star, the more attention you get, the more money you can normally charge. Is a better known lawyer really a better lawyer? Well, in that a good lawyer is one whose very presence in an interaction alters the balance, she is. To alter the balance, the lawyer has to be able, in one way or another to get an unusual degree of attention, and that is most likely as a result of her attracting attention on prior occasions.
The same goes for artists, of course. If you measure productivity by the number of dollars an artist pulls in through hours of work, you will find that artists who draw the most attention usually earn the most money. If you were to measure productivity by the amount of work completed per hour, or the number of strokes of paint on the canvas per hour, the result would be ridiculous. Sometimes a very slow and thoughtful artist derives far more attention than a quick one who produces schlock only.
Seen in this way, perhaps the greatest productivity is that of a movie actor who draws attention from millions of people. It can take as much or more effort to produce a movie that no one will bother to watch as it does one that draws a total audience in the hundreds of millions, so the famous actor may seem no more productive than an unknown one—if audience size is ignored. But surely the fact that so many people watch is some indication of greater success at work, so it makes sense to call a star more productive than an unknown.
What these examples suggest is that the right way to measure productivity is in terms of attention drawn. Even ordinary goods draw attention or they would never be bought. In a future column I will delve into some of the complexities of this, but for now it might be worthwhile to consider a simple formula: The more attention you think you can get by having an object, the more likely you are to buy it, and the more you will pay for it. In addition, the more you feel a need to pay attention to something, the more you are likely to be willing to pay money too. You are more likely to be willing to buy a book you plan to read than one that you know you won't, unless simply having the unread book around will impress those you want to impress. Similarly you buy clothes with the hope of drawing attention for your taste, attractiveness, good judgement, or uniqueness - whichever matters most to you. And the same with just about anything else.
Consider how this applies to computers themselves. If you buy a personal computer these days, it is not only to see the world through the Internet, but to be seen, whether by participating in chat rooms, sending e mail or setting up your own web page or list-serv. Or perhaps you use your computer mostly for simple word processing or desk-top publishing, turning out manuscripts which you hope will draw a better audience because they are more readable or attractive (or even more in number) than what you could have churned out without a computer. Even spreadsheet or database software offers chances of getting attention for the scenarios you devise or the clever bits of knowledge you have stored These hopes for somehow getting attention may be mistaken, but they go far in explaining why you buy the computer.
The chief problem in hopes for attention of course is that there is only is much attention to go around, whether on the Internet or in life as a whole. The mere fact that you have a web page for instance doesn't mean that anyone will actually find it and spend time looking at it. We live in a world with a finite amount of attention and once we focus all of it, or practically all directly or indirectly on each other, there is no more to be had. All we can hope to do is rearrange it, drawing more for ourselves to the disadvantage of others, for instance.
Once we find ourselves in a world where being productive really boils down to getting attention, total productivity can't rise. Rather, we each must work harder and harder to get even an average share of attention, or to hold onto the attention we already have. Thus, for almost everybody, the pressure to work more is clear. Our days become more and more packed, not less and less. We buy computers individually to increase our personal productivity and insofar as we measure success in terms of output, we do seem more productive, but once we measure it in terms of attention we get from others, "it ain't necessarily so."
Businesses are no different from the individuals who compose them, on this account. If you work at large firm, you might easily use your PC to get added attention from others within the firm without actually increasing the attention the firm as a whole gets at all. Your computer will a true source of your own productivity but do nothing for the firm.
Thus we should not be surprised that the rise of attention technology, which we mistakenly think of as information technology, has done and will continue to do little to increase overall productivity for nations or firms, but it will increase the overall emphasis on getting attention and make the race more and more pressured and difficult.