Defrag Blog

If you’ve been watching the economic numbers as of late, you might have noticed a trend: Productivity is surging and unemployment continues to be a huge, dragging factor. On twitter the other day, I started referring to it as the “jobless recovery” (and I’m not the first). To that end, some thoughts — and why I think it is all broadly positive for tech:

[sidenote: let me preface this by saying that I'm not an economist. Hell, I'm not even close. I've had an intense interest in finance since about 1996, and consider myself a "hobbyist" or "amateur" (in the best sense of the word) in the area. In other words, don't listen to me.]

1. I’ve heard several small business people say it, and I think it is gonna hold true across the U.S. economy - businesses are learning to do with less people, and don’t see the need to restart hiring.

2. That, of course, leads to a surge in productivity.

3. At the larger enterprise end, I think it becomes a virtuous cycle - as the C-suite seeks to automate everything possible (ie, compliance) and ramp up productivity in ANY way they can (from SSO into SaaS apps, to activity streams, wikis, idea/innovation management — anything that can be justified). Productivity IS the new battle cry.

4. That doesn’t just mean “enteprise 2.0″ - it also means discovery, semantic tools, identity infrastructure that enables it, compliance automation, etc.

5. This is all against a backdrop of what should be a short-to-mid term semi-bounce back in the markets and earnings, but not in unemployment. Ultimately, that (plus new gubmint initiatives) puts a cap on the GDP growth. I’m guessing that cap averages out to 1-2% over the next 3-5 years.

6. All of that is very positive for technology companies that are focused on helping to squeeze every last inch of productivity out of the workforces. Yes, we’re in for the productivity boom (much more so than the late 90s), and all of the accompanying big tech company blather and vaporware that will follow. (sidenote: Cloud computing is about agility, which is really just an enabler of productivity).

7. Will housing and the consumer *eventually* recover? Yea, sure. At some point. I could hazard a guess, but it’d really be a guess — say, housing in 5 years; the consumer - around the same time. We’ve hit some kind of “new normal” here, and every one should just get used to it.

In the meantime, be very very glad that you’re in the technology world, and get ready to get sick and tired of hearing about “productivity.”