Our first conversation of the morning touches on what’s at stake for the economy as an industry powered by connected things comes to fruition.
Our moderator is Washington Post Live editor Mary Jordan. She’ll interview Michael Mandel, chief economic strategist at the Progressive Policy Institute — the Washington based think tank sometimes referred to as former President Bill Clinton’s “Idea mill.”
Mandel’s research has included work on the data-driven economy and the impact of regulation on innovation. He has a Ph.D in economics from Harvard and is the author of four books.
“The extension of the Internet to the physical world is a huge step for theworld because we live in the physical world,” he says.
Mandel tells the All Things Connected audience that we can discuss the economy of the Internet of Things with three numbers.
Twenty percent is the estimate of the GDP that comes from the digital industry.
“That means that 80 percent of the economy is about physical industries,” says Mandel.
0.5 percent is the productivity gain of 2013 over 2012.
Mandel says it’s impossible to have a viable debate if the country’s productivity is that slow. He says not only have we not transformed the productivity of digital industries, but also the productivity of physical industries have been lagging.
6.7 percent is the unemployment rate. “We’ve grown used to thinking of technology as a job destroyer,” says Mandel. There’s a delayed step in this technological revolution, he says citing a skills mismatch associated with the expense of training.