JUST ANOTHER ACTUAL DAVID AND GOLIATH STORY:

Use IT or lose it: New calculations shed more light on Europe's productivity malaise (The Economist, 5/17/07)

It is now generally accepted that in around 1995, after 20 sluggish years, American productivity growth began a remarkable surge that only now seems to be subsiding. Yet the advances in information technology (IT) and the dramatic cheapening of computing power that lay behind that surge have had much less effect on Europe's productivity. In 2006, admittedly, Europe's output per hour grew faster than America's. But the cheer over that number merely points up the disappointment over the many years that came before.

The recent appearance of a new database, the fruit of a project called EU-KLEMS, that accounts for the sources of European growth and productivity does not alter this broad impression. [...]

[E]urope was not only worse than America at making IT, but also much worse at using it. That is borne out by the EU-KLEMS economists' attribution of output growth to the various inputs. In this exercise, because of the limitations of the data, they used figures for only ten countries and compared 1995-2004 with the previous 15 years rather than 25. Most European countries used more IT, relative to other forms of capital, after 1995. But America underwent a much bigger shift into new technologies.

Y2K was the greatest broken baker's window in history.

Posted by Orrin Judd at May 18, 2007 11:34 AM