Tag Archives: productivity

April 2024

Most frightening and/or depressing story: Peter Turchin’s description of a “wealth pump” leading to stagnation and political instability seems to fit the United States pretty well at this moment. The IMF shows that global productivity has been slowing since the US-caused financial crisis in 2008. In Turchin’s model, our November election will be a struggle between elites and counter-elites who both represent the wealthy and powerful. That sounds about right, but I still say it is a struggle between competence and incompetence, and competence is a minimum thing we need to survive in a dangerous world. In early April I thought things were trending painfully slowly, but clearly, in Biden’s direction. As I write this in early May I am no longer convinced of that.

Most hopeful story: Some tweaks to U.S. trade policy might be able to significantly ease the “border crisis” and create a broad political coalition of bigots, big business, and people who buy things in stores.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both: If the singularity is in fact near, our worries about a productivity slow down are almost over, and our new worries will be about boredom in our new lives of leisure. It doesn’t seem like a good idea to count on this happening in the very near future, and therefore stop trying to solve the problems we have at the moment. This would be one of those “nice to have” problems. If it does in fact materialize, the places to be will be the ones that manage to shut down Peter Turchin’s wealth pump and spread the newfound wealth, rather than the places where a chosen few live god-like existences while leaving the masses in squalor.

trade “fragmentation” vs. AI?

One interesting thing in the IMF report I mentioned recently forecasting a significant productivity slowdown: the positive effects of AI on productivity and the negative effects of inefficient trade policy were shown offsetting each other. Meanwhile, Eric Posner is concerned that humans will have psychological difficulties leading lives of leisure after the AI-driven productivity revolution, and after our political system correctly decides to redistribute the resulting wealth to everyone. I know, this could be a medium-term pain, long-term gain sort of thing. But how do we know the long term will come? And this kind of thinking clearly ignores the existential threats like climate change and biological weapons, unless you assume the AI productivity revolution will dispatch those threats without creating new ones.

is the world in a depression?

According to the IMF’s latest World Economic Outlook, maybe. And not just since Covid, but the world has been slowing since the 2008 financial crisis. They say it’s due to demographics (aging population, shrinking work force), “misallocation of resources” (low capital investment?), “fragmentation” (moving away from free trade?) and slowing innovation as measured by total factor productivity. Well crap. So we should have been investing in education, infrastructure, research and development all this time? Instead we let big business capture the political system, stifle competition and innovation, and starve the public realm apparently. Which is not even in their best interests in the long run. Our society is gradually slipping, and each time there is a crisis we are not able to bounce back all the way to our previous trend. Now we are looking at a looming food crisis and the loss of our coastal urban centers all over the world. And we are stupid enough to get ourselves into wars on top of all this.

generative AI in the workplace?

Microsoft is unleashing generative AI on the workplace imminently, according to Slate.

At Microsoft’s New York release event on Thursday, I watched as it revealed products that simplify and automate some of the worst parts of office life. The company demoed a text generator that can read long Word documents and write blog posts highlighting the most relevant points. It showed another feature that allows you to prompt Copilot to summarize a slew of unread messages from an email-happy co-worker. The technology can also read transcripts of meetings you miss and note the most relevant parts, or allow you to query the full discussions. Even simple updates like prompting Copilot to create a header image for a slide deck seem quite useful.

Slate

So maybe this can partially automate some useless tasks that are taking up our time. But if they are useless, do they need to be done at all? Are they adding value at all to begin with?

Here is some advice I would give young people new to the workplace:

  1. When people give you assignments, repeat them back to confirm you understand them. If they are still not clear, put them in writing and ask the person assigning the task to confirm. In most cases, they will like this.
  2. Keep a running list of things you have been asked to do, when they are due, what their status is, and any problems/obstacles/questions you are encountering to getting them done. Look at and update this list every day.
  3. Give updates on your tasks without being asked. When you have a question, encounter an issue, or realize you may not be able to meet a deadline, talk to the person assigning the work early and often about it. They will like this. Often deadlines can be moved or you can get help, but this gets harder as a deadline approaches.
  4. Keep a calendar. Look at it and update it every day.
  5. Make it a habit to take notes in all meetings and phone conversations. You don’t have to be a court reporter. Try to capture assignments and decisions. At the end of the day and again at the end of the week, look through all your notes, list new assignments, and move them to your assignment list.
  6. Basically, you want to be a rock solid and reliable “set it and forget it” employee. This doesn’t mean you do everything perfectly all the time with no help. It means that when someone assigns you a task, they know you will either do it perfectly and on time, or much more likely, you will come to them with updates and issues that need to be resolved to get the work done. Once they assign it to you, they don’t have to think about it again until you walk through the door.
  7. #1-6 are kind of it for maybe your first year. Once you are a master note taker, list and calendar keeper, at some point you will find yourself helping others to get organized. One day, you will find yourself tracking and communicating the work of a small team of people. Which brings me to communication…
  8. Reading, writing, and speaking are all important, of course. But what is really valuable as you start moving up the business ladder is starting to get a sense of how to communicate a message to an audience. I try to ask myself three questions before preparing a document or presentation: (1) Who specifically is my audience? (2) What is the take home message I would like my audience to hear and understand? and (3) What decisions or actions would I like my audience to take after hearing and understanding my message? Get this down, and at some point you will not just be the back office “getting things done” person (although you can make a perfectly good career of that if you want to), but you will find yourself in front of customers and senior management explaining things and adding value for your organization.
  9. Maybe it doesn’t need to be said, but take some time for humanity. A little small talk and banter is how humans connect, and as long as it doesn’t get out of hand it is positive for productivity. When you work in an office, get in the habit of saying hello when you get there and good-bye before you leave. It is annoying when someone just evaporates at 5 pm and you had an important question for them. If you need to vanish at exactly 5 pm, stick your head in at 4 pm and ask if there is anything critical people need from you during the last hour of the day. This is really helpful. If you don’t need to vanish at 5 pm, stick around for a little while and review the happenings of the day with co-workers. Every once in awhile, move the banter to a local eating or drinking establishment. This is how productive, creative, innovative teams are built and I see this culture vanishing.
  10. Notice I didn’t talk much about working from home. I just don’t think it works well. Try to be there in person as much as possible.

Now, do any of the things “generative AI” can do in the short term address anything above? I’m skeptical but willing to give it a chance. A big reason for all that note taking, list and calendar keeping/reviewing/updating I do is to form a big picture in my brain of what is going on in my organization and how I can add value to it. Even if a computer can form that big picture, that is not going to put it in my brain. Maybe a computer can go through a transcript of a meeting or phone call and pull out decisions and action items. It certainly should be able to keep a calendar and do scheduling. It might be valuable if first thing in the morning the computer would say to me “consider doing this thing next” or “consider doing one these two (or three) things next”, and this would always fit into some bigger picture goal of getting everything done on time, on budget and to a high standard. Maybe virtual reality will solve some of the problems with working from home eventually. I doubt we will be there any time soon, but I also don’t doubt the computers will get better at this over time.

remote work, productivity, and lazy kids today

I think this Fortune article (paywalled, but I was able to read it the first time I clicked) drawing conclusions about remote work based on productivity statistics is off base. Labor productivity, as I understand it, is dollars changing hands in the economy divided by hours people say they worked. There are a number of measurement problems here. First, in the short term it is just going to fluctuate with dollars changing hands, which fluctuates for all sorts of reasons, so it makes more sense to look at longer-term averages. Second, dollars changing hands is not a perfect measure of value – we could be paying the same number of dollars for crappier goods and services as our expectations are gradually lowered over time. I really suspect this is what is happening.

It does make sense to me that self-reported hours worked at home would be less productive. Even if most people are honest most of the time, some people are going to be less honest some of the time than they would be in an office. People are going to be more distracted. But in all these cases, they are going to report the same number of hours worked and get paid the same number of dollars they would have in the office. So there will be no effect on calculated productivity, while we get used to gradually shifting baseline of crappier goods and services over time.

I think another effect is that training and onboarding are getting harder in some sorts of jobs. Some jobs have a playbook telling a worker exactly what to do, but many jobs do not. In my field of engineering, there is not much of a playbook because we are often trying to apply existing knowledge to solve novel problems under changing external conditions. I learned this job in the 1990s and 2000s by spending a lot of extra time in the office at the end of the day shooting the breeze with colleagues, mentors, and clients. Somewhat frequently, someone would suggest moving these sessions to a local drinking establishment and they would go well into the evening. This was not necessarily healthy for work-life balance or for my liver and waistline, but it’s an important part of how I learned my job and industry and why I am good at it today. This time didn’t go on my time sheet, and yet it boosts my subjectively measured productivity today.

I don’t want to complain about today’s crop of young people, who are just as intelligent as my generation (perhaps more since they’ve been exposed to less lead and air pollution) and seem to have better health habits overall. But the combination of working from home, less informal interaction with mentors, and job hopping means it is much harder for them to learn to do jobs really well. In decade, they will be the ones doing most of the work and trying to train the generation under them, and again we will just get a gradually shifting baseline of lower expectations and worse outcomes, even if we may not be measuring that effectively in dollars.

U.S. labor market growth

Axios has a brief piece on the demographics of the labor force in the U.S. A tight labor market is not just a short-term phenomenon during the pandemic recovery.

In the 2010s, the massive millennial generation was entering the workforce, the massive baby bo0m generation was still hard at work, and there was a multi-year hangover from the deep recession caused by the global financial crisis. But now, boomers are retiring, millennials are approaching middle age, and the Gen Z that follows them is comparatively small.

Axios

So combine this trend with anti-immigrant politics, and we may have a problem. It could lead to the double-edged sword of higher wages and inflation, a trend toward toward greater automation and technological innovation, a general drag on economic growth (which could ultimately lead to deflation), left wing politics, right wing politics, business pressure for more globalization/offshoring, or some combination of any of these (other than inflation and deflation, but maybe it is possible to have a sudden reversal between these and hard for policy to react quickly even if we knew what to do). It is hard to know what to do, but rational immigration policies based on skills and education to fill jobs available would be a start.

Did productivity triple during the pandemic?

I’m hearing claims that “productivity tripled during the pandemic”, and maybe this is the computer and internet and mobile chickens finally coming home to roost and deliver on the promises made way back in the 1990s. Maybe there is some truth to this, but it seems much more likely that the denominator contracted suddenly (hours worked) than that the numerator suddenly expanded.

Here’s one graph I have seen referenced.

What could be going on here? Well I don’t know, you should consult the experts. But of course I can speculate:

  • Lower-productivity (economic output measured in dollars per hour worked, not in the worker’s sense of satisfaction, sanity, or self-worth) jobs suddenly disappeared, and higher-productivity ones (reverse caveats above) were left, so average productivity went up.
  • I’ve heard it suggested tat workers who still had jobs suddenly had no commuting time, so they worked some extra hours, and got more done but didn’t necessarily report the extra hours worked to their employers. I might buy this as a marginal, short-lived effect. Maybe a few young go-getters did this, but certainly not us middle-aged parents who suddenly had small children bouncing off the walls 24-7.
  • I will buy the idea that workers were more productivity with the new software (Microsoft Teams, Zoom, etc.) than they would have been in the same situation with software and communication options available a few years ago. I’m not sure I buy into the idea that they were more productive at home with these tools than they would have been in the office.
  • Maybe there was a sort of mania of productivity for the work-from-home set at the start of the pandemic, for 2-3 months or so. Then it crashed back to earth, which you can sort of infer from the limited number of data points here.

So no, the data are interesting but I am going to say the singularity did not occur last year. I think there may have been a bump in average productivity per (remaining) worker when some workers just disappeared from the economy, which is not a net positive, and I think there may have been a short-term mania among work-from-home professionals that is now feeding into our widespread burnout situation a year and a half or so down the line, and that is not a long-term positive. I do think the rapid/non-voluntary adoption of new software and communication tools on a massive scale probably gave a bump to technological progress, which might pay longer-term dividends.

The pandemic also gave a sudden boost to biotechnology, which may ultimately end disease as we know it, create unimaginably horrible weapons that kill us all, or both.

March 2021 in Review

Most frightening and/or depressing story: In the U.S. upper Midwest (I don’t know if this region is better or worse than the country as a whole, or why they picked it), electric blackouts average 92 minutes per year, versus 4 minutes per year in Japan.

Most hopeful story: I officially released my infrastructure plan for America, a few weeks before Joe Biden released his. None of the Sunday morning talk shows has called me to discuss so far. Unfortunately, I do not have the resources of the U.S. Treasury or Federal Reserve available to me. Of course, neither does he unless he can convince Congress to go along with at least some portion of his plans. Looking at his proposal, I think he is proposing to direct the fire hoses at the right fires (children, education, research, water, the electric grid and electric vehicles, maintenance of highways and roads, housing, and ecosystems. There is still no real planning involved, because planning needs to be done in between crises and it never is. Still, I think it is a good proposal that will pay off economically while helping real people, and I hope a substantial portion of it survives.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both: One study says 1-2 days per week is a sweet spot for working from home in terms of a positive economic contribution at the national scale. I think it is about right psychologically for many people too. However, this was a very theoretical simulation, and other studies attempting to measure this at the individual or firm scale have come up with a 20-50% loss in productivity. I think the jury is still out on this one, but I know from personal experience that people need to interact and communicate regularly for teams to be productive, and some people require more supervision than others, and I don’t think technology is a perfect substitute for doing these things in person so far.

productivity of working from home

In industries with billable hours, productivity is not particularly easy to measure and an hour billed from home looks just fine on paper. To managers, that is an hour on a spreadsheet with somebody else paying for the coffee, lights, heat, insurance, cleaning (or just not cleaning), etc. But there are some studies from industries where productivity is more measurable. Results are all over the place, but this particular study from Japan puts working from home at about a 30% productivity loss compared to the office. Something in the range of a 20-50% loss seems to be a common assumption from a range of studies.

how much working from home is the right amount?

1-2 days a week is a sweet spot, according to human resources guidelines and some actual research.

long-run effects of telecommuting are all described by bell-shaped curves: Telecommuting first increases skilled and unskilled workers’ productivity and GDP up to some threshold. Beyond that level, a higher share of home-workers reduces the strength of the knowledge and information spillovers which, therefore, do not produce desirable effects. Too much WFH may thus be detrimental to long-run innovation and growth due to limitations of information and communication technologies as well as foregone agglomeration economies in the form of face-to-face contact and knowledge spillovers.2 Figure 1 illustrates this point via some back-of-the-envelope computations using consensus parameter values. The WFH share that maximizes GDP varies between 20% and 40% in our simulations – one or two working days per 5-day week. This is broadly in line with recommendations made in human resource management (Gajendran and Harrison 2007).

Vox

It wasn’t exactly clear to me whether the model mentioned here distinguished between the share of people work from home and the share of an individual’s work days that would be at home. That may not matter to a mathematical model, but it obviously matters to an individual.

1-2 days sounds about right to me. It’s enough to get the personal collaboration and interaction, which is important both for innovation and psychological reasons. Just having a change of scenery a couple days a week is important for psychological reasons too. That 1-2 days at home does cut down on all that wasted time and pollution caused by typical car commutes. This wouldn’t have to be the case if more people lived in communities where they could have active commutes (walking or biking), because the commute then provides some fresh air, exercise, a change of scenery, and sometimes a little social interaction. Sometimes its nice to stop at a coffee shop on the way in, and sit on a park bench for a few minutes or enjoy an…er…adult beverage on the way home (with no possibility of drunk driving, although angry car commuters can be a danger to mildly inebriated pedestrian. I’ve also noticed that car commuters seem particularly angry on Friday afternoons, while walking commuters seem particularly happy. Why is that? Because the walking commuter’s weekend has started and the car commuter’s psychological weekend doesn’t start until the car is in the garage, and in between that moment and the moment they are in are many forces outside their control.) It helps to have “third places” to unwind a bit between work and home. This is a major reason I live where I do, and one thing I have really missed during the pandemic. (Another thing I have missed is my children to and from school, parks, playgrounds, museums, etc.) Over the past year, the headaches of city living have outweighed the benefits I had taken for granted before that.

A couple more thoughts on working from home:

  • Obviously, some kinds of jobs can do it more than others. The kind that can tend to be higher paying. I think we have all learned something over the past year about “essential workers”, which actually means essential jobs done by expendable workers. Here’s a crazy idea – people who volunteer to do dangerous jobs like deep sea diving and drilling for oil in war zones get hazard pay to make it worth their while. It should be possible to have a government program that supplements the pay of ordinary people doing ordinary jobs under emergency conditions.
  • Co-working seems to me to hold some promise as a compromise between working in a corporate office and working from home. You get a professional atmosphere, a bit of breathing room between work and home (which let’s be honest, your family members may appreciate as much as you do), and you can significantly cut down on your commute – ideally, your co-working site should be accessible on foot, by 100% safe protected bike lane, or in a pinch by public transportation. Over time, this could allow your employer to downsize the office if that is what they want to do, without transferring 100% of the burden of operating an inefficient and far from ideal professional office to each individual worker in their family home. Some employers may have concerns about confidentiality, but outside high-security industries this should be manageable through things like sound-proof booths in the co-working sites.
  • Finally, my observation among professional workers is that some people and some specific jobs are better suited to it than others. I have noticed that the same people who struggled with communication in the office (for a variety of reasons – language barrier, personality type, or just being young and not having figured it out yet) are the ones who have been left behind in the co-working world. If those people are otherwise valuable, employers need to figure out how to bring them along through mentoring, training, carrots and/or sticks of some sort or they won’t realize the career potential they otherwise could have.