This research was published on January 25th, 2022 in Fortune

Digital disruption may be an accomplished fact for consumers enjoying ever more innovation, and for the firms driving it, but there is little evidence of macroeconomic disruption. Despite the relentless transformation of the user experience, the idea of meaningfully higher productivity growth across the economy remains wishful thinking.

If digital tech is to drive productivity growth, it must meaningfully and structurally change the ratio of inputs and outputs. In the goods economy, automation technology has achieved that by gradually removing labor cost from production. But in the service economy, which critically depends on human interaction, productivity growth has been and remains sluggish even as innovation continues at breakneck speed.

Despite this, we should not rule out the idea that digital technology could overcome a set of hurdles and deliver a meaningful macroeconomic tailwind — in future. Yet productivity shifts are rarely linear or fast. They happen slowly — as did network computing from the mid-1990s after decades of disappointing growth impact.