Google’s decision to separate its profitable businesses from its money-losing “moonshot” ventures has offered a window into why American productivity is struggling despite so much exciting technological innovation.
The things at which Google and its peers excel, from Internet search to mobile software, are changing how we work, play and communicate, yet have had little discernible macroeconomic impact. Productivity—the goods and services a worker produces in an hour—grew just 0.4% per year over the past five years, one of the slowest stretches in the period since World War II. This is troubling, because over the long run productivity determines our standard of living.
Image: Google’s high-profile project to create self-driving cars is the sort of money-losing venture the company is looking to ring-fence from its profitable tech core. The move illustrates both the potential and limits of innovation. PHOTO: TONY AVELAR/ASSOCIATED PRESS
