They show R&D is effective and R&D spending is up, and conclude obsolescence must be the reason this is not reflected in productivity pretty much by process of elimination. However there is an alternative - that for reasons unrelated to R&D, productivity is actually being driven down, and ever increasing R&D output is necessary just to maintain current levels of productivity.
In particular, they are looking at US manufacturing. While this is a diverse industry, it's clear that in many subfields there is quite a bit of saturation. When everyone has a car, and cars last longer and longer, the need for new cars goes down. Once you get to a point where your industrial capacity can provide enough to satisfy demand, further R&D only reduces the costs of satisfying that demand, not increased output, and in some cases improvements to product quality may even further reduce demand. In the US, light vehicle sales peaked in 2000, and while the numbers dipped during various market downturns, they keep coming back to roughly the same asymptote. The numbers are even more striking if you break it down further - the annual demand for personal vehicles has fallen by a factor of 4 since 1965, and by a factor of 3 since 2000, the difference being made up by increased commercial vehicle demand. Looking at other industries like steel paints a similar picture.
This would only decrease productivity if there was no other demands for people to do something; if this was a simultaneous saturation across everything that a company could do with their current resources.
> if this was a simultaneous saturation across everything that a company could do with their current resources.
That's exactly what I am describing. It's not that a particular style of vehicle is no longer in demand due to a shift in preferences and factories would need to be retooled to create a different type of vehicle, demand for all vehicles has fallen. Yes, the people who once worked on those auto assembly lines will generally go on to do something else, but it won't count as an increase in productivity in car production.
More generally, demand for pretty much all US domestic manufactured goods has flatlined or fallen. Production capacity is not the limiting factor in almost anything mass produced nowadays. Even dramatic reductions in manufacturing cost aren't going to induce any demand. Throw in demographic changes where there are fewer people who have needs to be satisfied, and better products which don't need to be replaced as often, and we ought to expect falling demand across the board.
What happens if the prices of cars are depressed by the increasing efficiency, competition and product longevity, and the people displaced through efficiency are taking lower paid jobs.
If you measure output as GDP - wouldn't GDP have gone down - even if actual production of goods and services has gone up?
Not sure how they measure productivity here.
if you think it's bad now for reasons of increased reliability and efficiency throughout -- wait till the population starts dropping as boomers die and zoomers don't have kids
Not sure I follow. Sure output would drop if the population dropped - but then so would demand - so unless you have demographic imbalance I'm not sure it's a problem.
Perhaps if you are at the apex skimming off a fraction of a percentage of total output then the size of the output matters.
Or perhaps if you are holding debt and expecting the repayments with interest to be made.