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Abstract

This chapter is excerpted from 'Breakthrough: A Growth Revolution'. What's necessary for the United States and other developed nations to realize stronger growth and more equal incomes? What's necessary for families to feel vacations, college educations, and retirements are possible? Will Artificial Intelligence (AI) automate or augment workers' jobs? Will the 2020-2021 global pandemic be sufficiently disruptive to deliver fundamental transformation? The growth dynamics of the developed economies experience significant variation over long periods. This book examines the economic logic of such variation and whether the long-term movement is the result of random events or whether improved outcomes arise from within the system. To explore these questions, the Fourth Industrial Revolution is a unique frame to assess global economic transformation in the decades ahead. The industrial revolution framework provides a point-in-time reference for placing current events in the context of sustained, multidecade periods of faster or slower GDP and productivity growth. Political, social, and economic metamorphoses have accompanied each revolution. In each revolution, a new general-purpose technology, such as information technology, initially gives rise to 'mushroom' growth with scattered success popping up, while latter 'yeasty' growth takes hold with economic activity leavened by increased capital investment, education, skills, knowledge transfer, technology diffusion, and labor income share. Successful economic performance in the decades ahead will depend on whether households, businesses, and governments are willing to alter behavior, engage in innovation, achieve improved balance between traditional and nontraditional values and beliefs, and respond to pressures to bring about a future of more rapid growth and more equal income distribution. Energy technology evolution will address the climate change and global warming consequences of fossil-fuel technologies and, if successful, over the long-term result in renewable energy sources, reducing energy expense. The book proposes a growth and fairness agenda through which stronger economic growth and more equally distributed incomes can be possible. 1) Recognize traditional policy actions may be insufficient to achieve stronger long-term growth. 2) Promote improved confidence and a positive outlook among small and medium enterprises. 3) Encourage advances in AI technology while addressing risks and fairness issues. 4) Support deeper worker engagement between business leaders and workers. 5) Seek a new social contract among workers, businesses, and governments.

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Abstract

This chapter is excerpted from 'Breakthrough: A Growth Revolution'. What's necessary for the United States and other developed nations to realize stronger growth and more equal incomes? What's necessary for families to feel vacations, college educations, and retirements are possible? Will Artificial Intelligence (AI) automate or augment workers' jobs? Will the 2020-2021 global pandemic be sufficiently disruptive to deliver fundamental transformation? The growth dynamics of the developed economies experience significant variation over long periods. This book examines the economic logic of such variation and whether the long-term movement is the result of random events or whether improved outcomes arise from within the system. To explore these questions, the Fourth Industrial Revolution is a unique frame to assess global economic transformation in the decades ahead. The industrial revolution framework provides a point-in-time reference for placing current events in the context of sustained, multidecade periods of faster or slower GDP and productivity growth. Political, social, and economic metamorphoses have accompanied each revolution. In each revolution, a new general-purpose technology, such as information technology, initially gives rise to 'mushroom' growth with scattered success popping up, while latter 'yeasty' growth takes hold with economic activity leavened by increased capital investment, education, skills, knowledge transfer, technology diffusion, and labor income share. Successful economic performance in the decades ahead will depend on whether households, businesses, and governments are willing to alter behavior, engage in innovation, achieve improved balance between traditional and nontraditional values and beliefs, and respond to pressures to bring about a future of more rapid growth and more equal income distribution. Energy technology evolution will address the climate change and global warming consequences of fossil-fuel technologies and, if successful, over the long-term result in renewable energy sources, reducing energy expense. The book proposes a growth and fairness agenda through which stronger economic growth and more equally distributed incomes can be possible. 1) Recognize traditional policy actions may be insufficient to achieve stronger long-term growth. 2) Promote improved confidence and a positive outlook among small and medium enterprises. 3) Encourage advances in AI technology while addressing risks and fairness issues. 4) Support deeper worker engagement between business leaders and workers. 5) Seek a new social contract among workers, businesses, and governments.

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