July Commerce Club-Productivity, Technology, Trade and Jobs
July 2019 Commerce Club Featuring Peter Rodriguez, Jones Graduate School of Business, Rice University
The only major departures from an average 1.75% growth rate of U.S. Gross Domestic Product (GDP) Per Person over 147 years, 1870-2017, has been during the Great Depression and World War II. Peter Rodriguez, dean at Rice University’s Jones School of Business, opened his presentation entitled “Productivity, Technology, Trade and Jobs” around this unique data set at the Port Bureau’s Commerce Club luncheon on July 11.
To Rodriguez, politics don’t matter much when looking at the overall growth of the nation’s economy. “There is no evidence, historically or otherwise, that who’s in office, and I’ll go beyond that in just a few minutes, really, really matters,” said Rodriguez. “And that should be good news. If you’re worried about who’s in office for growth or anything else, I’d say don’t.”
Referring to the GDP Per Person chart, Rodriquez pointed out the “extraordinarily steady” performance of the U.S. economy for more than 14 decades. “What it tells you is that what really drives the economy is all of you and all the people out there in the private sector,” Rodriguez stressed. “In the economy that is bounded by the democratic society that we have, there are really good rules about open trade, open commerce that’s really a steadying factor, not just in the United States, but in the world over, and we should take heart, for that’s been true for the vast majority of our experience.”
The steady economic factors hold true when examining the impacts of technology on the GDP per Person over the same time period. Rodriguez looked at the years of 1876-1877 showing the introduction of technologies such as the telephone, light bulb, radio, and automobile. “Those are what I call big inventions that had a huge impact on society, but in terms of economic growth, it’s relatively modest,” noted Rodriguez. “It changes industries; it changes profitability. But for overall incomes for average people, they’re relatively modest.”
The statistical evidence for steady economic growth holds true on an international level as well. Charts showing trade and economic growth in the United Kingdom, Canada, Denmark, Sweden, and Australia reflected a similar economic growth rate as the U.S. Rodriguez pointed out that while the various countries may hold differing views on certain issues, economically speaking, they don’t operate very differently from each other.
Trade was cited as a vital economic growth factor by Rodriguez. “We know that international trade makes an economy growth faster. We know that the most productive firms engage in international trade,” Rodriguez said. “Not only do the most impressive firms trade more, but the trade actually, in turn, makes them more productive.”
Education was another important aspect of the economy named by Rodriguez. Charting income data for adults over 25 during the time period of 1990 through the present, Rodriguez showed that individuals with a bachelor’s degree, or even high school diplomas, experienced significantly less unemployment during difficult financial years than those who had not finished high school.
Lastly, Rodriguez addressed the impacts of technology on jobs and income. Areas most vulnerable due to technological implementation include jobs that rely on very predictable physical work, such as fine-equipment installation and repair workers, food prep workers, general mechanics, etc. Also at higher risk are office support workers, including IT, information and record clerks, and administrative assistants. Calculated to be more invulnerable to automation were building professions, such as architects, surveyors, construction workers, and crane and tower operators.
Summing up his presentation, Rodriguez illustrated the value of an outstanding manager in any business. “One of the most robust findings any economist can show you is that good management corresponds with good performance in a company,” said Rodriguez. “It’s really hard to find good managers that can make hard business decisions in the right amount of time – who can make hard choices and execute. Ideas are good; ideas are great; ideas are plentiful. Execution is everything.”
Peter Rodriguez is dean of the Jesse H. Jones Graduate School of Business at Rice University. He is also an economist and professor of strategic management, teaches classes on global macroeconomics and economic growth and development, and is “into everything Houston” from sports teams to food to culture.
Rice Business Executive Education is offering Greater Houston Port Bureau members a special 20% discount price for their upcoming programs. For information and to register go to: BUSINESS.RICE.EDU/EE. Use code HPB20 to register.
- Date September 5, 2019
- Tags 2019 August