Great article! Makes me want to dig in further on historical labor productivity gains in general. A few questions and comments:
1. Labor productivity - you mention in the first paragraph that labor productivity has grown 89% since 2000 (in the US?). But then in the subsequent paragraph it chart and CAGR numbers make it seem like it should be closer to 60? Maybe I am misreading. Also worth noting that the labor force participation rate has decreased about 5% over the last 20-25 years, which would boost productivity at equal outputs. It does seem clear that the initial onset of PC’s, internet, software created better gains than the resulting SaaS boom… until now?
2. The nice anecdotes about PC’s and spreadsheets make me think of what the existing analog would be for tech. Maybe that overall companies will shed workers, but more will transition to being solopreneurs, micro-funded start-ups, small businesses in general and produce in aggregate more output. Would you need to see an increase in the labor force participation rate for this to be a meaningful change, or at least a nominal increase in tech employment?
3. Sundar stated that Google measured a 10% boost in productivity due to AI. What is your take on that? It seems significant that one of the AI innovators, who seems to have a good systematic way of measuring output, is achieving *only* 10% gains, especially when you constantly hear the 30% number among tech people. Perhaps AI currently delivers much better gains to the early part of the product development cycle vs. further along with mature products and teams in mature markets.
Finally what is your take on Andreesen's comment that AI won't come for VC's.. is it harder or easier out there for a VC right now? If you don't need capital to start a company and create value, how does it affect VC?
Great article! Makes me want to dig in further on historical labor productivity gains in general. A few questions and comments:
1. Labor productivity - you mention in the first paragraph that labor productivity has grown 89% since 2000 (in the US?). But then in the subsequent paragraph it chart and CAGR numbers make it seem like it should be closer to 60? Maybe I am misreading. Also worth noting that the labor force participation rate has decreased about 5% over the last 20-25 years, which would boost productivity at equal outputs. It does seem clear that the initial onset of PC’s, internet, software created better gains than the resulting SaaS boom… until now?
2. The nice anecdotes about PC’s and spreadsheets make me think of what the existing analog would be for tech. Maybe that overall companies will shed workers, but more will transition to being solopreneurs, micro-funded start-ups, small businesses in general and produce in aggregate more output. Would you need to see an increase in the labor force participation rate for this to be a meaningful change, or at least a nominal increase in tech employment?
3. Sundar stated that Google measured a 10% boost in productivity due to AI. What is your take on that? It seems significant that one of the AI innovators, who seems to have a good systematic way of measuring output, is achieving *only* 10% gains, especially when you constantly hear the 30% number among tech people. Perhaps AI currently delivers much better gains to the early part of the product development cycle vs. further along with mature products and teams in mature markets.
Finally what is your take on Andreesen's comment that AI won't come for VC's.. is it harder or easier out there for a VC right now? If you don't need capital to start a company and create value, how does it affect VC?