To Ephiphany--and Beyond!

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Opinion

To Ephiphany--and Beyond!

4/1/2004

By Kenneth C. Green

Productivity has been in the news a lot over the past few months. Economists, politicians, and pundits all cite productivity as the leading factor contributing to the jobless economic recovery.

Read beyond the headlines and technology emerges as the official explanation for the recent productivity gains in the American economy. Admittedly, many of us are working longer and assuming additional responsibilities for no increment in pay. But our extra efforts notwithstanding, Federal Reserve Chairman Alan Greenspan and other sage observers tell us that the current productivity gains reflect, in part, returns for the corporate investment in information technology over the past two decades.

In this political season it is probably best to let politicians argue over the numbers and nuances of recession and recovery. Then again, I always thought that Ronald Reagan, an economics major at Eureka College (Class of ’32), had it right: a recession is when your neighbor loses his or her job, while a depression is when you lose yours.

However you feel about the current economy, economists have a fixed and firm definition for productivity. My daughter’s econ text offers this definition: “the amount of product produced by each unit of capital or labor.” Technology, we know, contributes to productivity because it enables us to produce more or better products or services at a constant or reduced cost, i.e., with fewer “units of capital or labor.”

Interestingly, it took a long time for Greenspan and company to find evidence of the technology bang for all the corporate bucks spent on IT over the past two decades. For example, consider the billions that corporations spent on desktop computers, software, and training during the first 10-12 years of the current IT revolution, from the IBM PC to the beginnings of the Web (1982-1994). The year 1994 is important because that’s when corporate spending on information technology finally surpassed corporate expenditures on manufacturing technology. Yet it took more than a decade, well into the late 1990s, before Greenspan and other economists could proclaim a real return on investment (ROI) for the corporate spending on IT. Of course, economists have a fixed and firm definition for productivity.

Which leads us to the meaning of productivity in education. I suspect that most of us in academe struggle to define productivity for our sector of the economy. We generally prefer not to view our work in terms of inputs, outputs, or products. Ours is a true profession, a calling if you will. We may “produce” knowledge, scholarship, and instruction, but we don’t manufacture these “products” and typically resent any effort to categorize our work in this manner.

In economic terms we know how to improve the instructional dimensions of “academic productivity.” For example, we could contain salaries, transfer more of the teaching load to assistant professors or part-time faculty, or increase class size. By definition, any of these strategies would make academe “more productive” because we are changing (reducing) the ratio of inputs (capital and labor) to outputs (number of students taught).