Learning by Doing: The Real Connection between Innovation, Wages, and Wealth

"Economic historians who go back and look at the evidence of previous technology shifts are incredibly helpful. When I was researching my book, I was struck by how many of the questions that we are contending with, at least from the perspectives of labour markets, and the economy and economic structure, were questions that have been asked in previous transitions. Bessen’s questions, at a broad level, are quite similar to something I ask in my book, which is, ‘Why do we feel the impact of technology everywhere, except in wages?’ His argument is that it takes time to acquire the relevant knowledge and skills when a new technology emerges. He has a wonderful example of how long it took for typewriters to result in higher wages for the growing pool of typists. Many of the dynamics that we see in the computer industry played out 100 years ago with typing. There were many different typewriter standards, then they settled on one, and then you had typewriting school, and it drove increasing wages. It just took a long time for companies to figure out how to use this new technology. “Many of the dynamics that we see in the computer industry played out 100 years ago with typing” One of his key points is that a lot of this technical knowledge is picked up on the job, not through the classroom, which is why he calls it ‘learning by doing.’ It speaks to the importance of having that kind of apprenticeship model when you’re trying to get these technologies across. A lot of the work that I did was around this idea that many of the key aspects for driving adoption of technologies related to learning. So I was really interested to try to understand recent analyses of learning, in its broadest sense, around new technologies. It’s basically positive. Bessen talks about the kinds of incentives and policies that are needed to foster learning on the job, really with a US angle. Another point he makes is that this also relates to the balance of power between the providers of capital and the workers. Whenever you talk or think about policies like this, you’re always also thinking about how political power plays out between labour and capital."