The Triad Perspective
     


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Productivity Paradox

 
I'm not a big user of Facebook.  Or WhatsApp.  Or Snapchat.  Same goes for Tumblr. Pinterest. Instagram. Vine. Kik. Video games.  In fact, I've never used most of these things.  I'm not sure if I should be embarrassed or not.  I've only got a Facebook account because my daughter signed me up.  I look at it rarely, usually when I get a notification from someone.  I'm just not very interested.
 
But I'm obviously in the minority.  Billions of people consume this stuff.  It's estimated that adults in 2015 spent almost 10 hours per day either watching TV, or connected to the internet via a desktop, laptop or mobile device.  Around 50% of U.S. adults access Facebook daily.  When you figure 8 hours of sleep, clearly some of this social interaction--maybe much more than we care to admit--is occurring in the workplace.
 
There are 2 basic ways to produce more.  More people.  More output per person employed.  So historically the productive capacity of the U.S. economy was based on population growth and increased output per worker, due to more and better machinery, efficiency improvements, etc.  If real productivity--output excluding inflation--grows at 3% per year, our standard of living will double in about 24 years.  But if productivity grows at only 1.5% per year, it takes twice as long--48 years--to double our living standards.  So, improving the productive capacity of our economy is a big deal.  Small gains translate into big improvements in living standards over long periods of time. 
 
According to U.S. government figures, output per worker rose 2.8% per year from 1994 to 2003.  Since then, it's increased 1.3% per year.  Facebook emerged in 2004.  Just a coincidence?
 
My thoroughly unscientific assessment--I'll admit upfront I have no data to back this up--is that the source of our productivity slowdown is--us.  You, your neighbors, friends, me--well not me--but everyone else.  It's not that we're older, slower, dumber or lazier.
 
We're distracted.  And these distractions become addictive.  And not overly productive.  Much of this social media stuff is junk food for the brain.  It doesn't manufacture cars, grow corn, build homes, repair appliances, or cut hair.  In short, much of it is a massive waste of time.
 
What to do?  On one level, who cares?  If this is how people want to entertain themselves then so be it.  But the challenge is when it interferes with the workplace, which I'd suggest happens in a big way.  It's probably just a coincidence that Facebook was born in 2004, right around the time our national productivity started slowing noticeably.  Yeah, that's it, just a coincidence.  Right, like my thinning hair and expanding waistline are just coincident with my getting older.
 
As with most things in this world of plenty, the difficulty is staying disciplined at work.  Not jumping on Facebook whenever a new post arrives.  Or not watching hours of YouTube cat videos.  Or checking email only a few times each day.  It requires discipline and effort.
 
One of my favorite quotes is: " we have met the enemy, and he is us ."  That's the case with the U.S.  We can choose to spend more time on leisure, work harder, or work smarter.  Each path has tradeoffs but if we want to give future generations a better life, we'll need to put down the Facebook app at work and focus on the task at hand.
 
-John Heldman, CFA


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