Almost nothing in economics is more important, or mysterious, than productivity. It means the amount of stuff — goods, services, economic value — produced for a given amount of input. It is productivity that separates today's rich, modern consumer societies from subsistence farmers living on the edge of starvation.
The Industrial Revolution created technologies such as electricity, turbines and internal combustion engines that supercharged productivity, which is why we live incomparably better lives than those of our great-great-grandparents. If productivity slows, we can expect our living standards to stagnate, no matter what other steps we take.
The problem is, productivity growth is slowing. After decades of robust growth, it flatlined in the 1970s and 1980s, only to surge ahead again in the 1990s and early 2000s. But for the last decade or so, productivity has stumbled again, and the worry is that the information-technology revolution was only a minor, short-lived reprieve from an inexorable stagnation. This pessimistic case has been made by economists Robert Gordon and Tyler Cowen. As they see it, scientists and engineers have simply picked most of the low-hanging fruit of knowledge available in the universe.