The Services Conundrum

Thomas Piketty’s doorstop, Capital In the Twenty-First Century, is so massive it gave a new name to a classic index of unreadness. But it’s actually really good.

And, it includes the observation that, historically, the services sector has seen lower productivity gains than the industrialized goods sector because services tend to be less sensitive to technological advances.

This is a big deal because, according to the US Bureau Of Labor Statistics, as cited in Mary Meeker’s latest internet trends presentation, services jobs represent 86% of all US jobs, up from 56% a little more than 70 years ago.

What if we’re at the beginning of a long boom in services productivity the way we were at the beginning of a long boom in industrialized goods productivity in the early 1800s?

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