Technology has had a $500 billion impact on nation’s wealth

When any new technology is developed, there’s always a fear about what kind of impact it will have on employment. But does technology rob us of jobs or does it make us wealthier as a society?

If you look back at the 19th century in American history, something like 90% of Americans earned their living in agriculture. There was enormous fear that mechanization of agricultural work would lead to massive unemployment and starvation. The reality is that as we mechanized it completely changed the nature of work. People were forced to switch to jobs that still required human skill.

Each time technology has entered workplaces since then, people have had the same fears. Ultimately, innovation and technology lead to a direct rise in overall productivity. The ability to make goods gets cheaper and cheaper and that raises the wealth of society. I realize that’s cold comfort to a worker who’s displaced in the short term. But long term, that individual and society as a whole generally end up wealthier.

The computer has been a modern inflection point in this debate. Some economists at the Federal Reserve Bank of Atlanta ran the math to see if computers helped or harmed us. Of course, their analysis can always be challenged, but they found an emphatic benefit. Their estimate is the introduction of the computer into the workplace has equated to $500 billion of benefits from productivity gains, according to numbers I saw in The Wall Street Journal.

Technology is not our enemy, it is our friend.

Editor’s note: This segment originally aired in April 2011.