The productivity boom

(written by Lawrence Krubner, however indented passages are often quotes)

This sounds about right:

Rapid output growth without equally rapid capital-stock or employment growth must have reflected rapid productivity growth. This is the paradox of the 1930’s. Despite being a period of chronic high unemployment, corporate bankruptcies, and continuing financial difficulties, the 1930’s recorded the fastest productivity growth of any decade in US history.

How could this be? As the economic historian Alexander Field has shown, many firms took the “down time” created by weak demand for their products to reorganize their operations. Factories that had previously used a single centralized power source installed more flexible small electric motors on the shop floor. Railways reorganized their operations to make more efficient use of both rolling stock and workers. More firms established modern personnel-management departments and in-house research labs.

There are hints of firms responding similarly now. General Motors, faced with an existential crisis, has sought to transform its business model. US airlines have used the lull in demand for their services to reorganize both their equipment and personnel, much like the railways in the 1930’s. Firms in both manufacturing and services are adopting new information technologies – today’s analog to small electric motors – to optimize supply chains and quality-management systems.

I see a lot of companies trying to revamp their computer systems.