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Stanford economist Erik Brynjolfsson and his colleagues have created a new measure to try to capture the contribution of these digital goods. Called GDP-B (the B is for benefits), it is calculated by using online surveys to ask people just how much they value various digital services. What would you have to be paid, for example, to live a month without Facebook?

The calculations suggest that US consumers have gained some $225 billion in uncounted value from Facebook alone since 2004. Wikipedia added $42 billion. Whether GDP-B could fully account for the seeming slowdown in productivity is uncertain, but it does provide evidence that many economists and policymakers may have undervalued the digital revolution. And that, says Brynjolfsson, has important implications for how much we should invest in digital infrastructure and prioritize certain areas of innovation.

GDP-B is one of a larger set of efforts to find statistics that more accurately reflect the changes we care about. The idea is not to throw out GDP, but to complement it with other metrics that more broadly reflect what we might call progress.

Another such measure is the Social Progress Index, which was created by a pair of economists, MITs Scott Stern and Harvards Michael Porter. It collects data from 163 countries on factors including environmental quality, access to health care and education, traffic deaths, and crime. While wealthier countries, unsurprisingly, tend to do better on this index, Stern says the idea is to look at where social progress diverges from GDP per capita. That shows how some countries, even poor ones, are better than others at turning economic growth into valued social changes.

"Imagining when the covid-19 pandemic is over ... which should your country prioritize more?"

SOURCE: IPSOS/SOCIAL PROGRESS IMPERATIVE

The US, with one of the worlds highest levels of GDP per capita, is 28th in the index, and is one of only four countries whose scores have declined since 2014. Norway, which is similarly wealthy, was ranked first in 2020 (see chart below). Some poorer countries also outperform.

Very often the decisions about innovation and technology are about its economic impact, says Stern. Theres nothing wrong with that. But are we directing the economic rewards to areas that will advance social progress?

A similar thought lies behind another alternative to GDP, developed by Diane Coyle and her colleagues at the Bennett Institute for Public Policy in Cambridge, UK. Their measure of what they call the wealth economy is based on what they define as the assets of a society, including its human capital (the health and skills of its people), natural capital (its resources and the health of the environment), and social capital (trust and social cohesion).

Its a hugely ambitious project that attempts to create a couple of key measurements for each asset. Those numbers, says Coyle, are meant to inform better decisions about technology and innovation, including decisions on the priorities for government investment. She says the approach allows you to ask, What is the technology doing for people?

The value of these various alternatives to GDP is that they provide a broader picture of how our lives are changing as a result of technology. Had they been in place 20 years ago, they might have shined light on crises we were late in seeing, such as the growth of income inequality and the rapid deterioration of our climate. If 20 years ago was a time of peak techno-optimism, it might have prompted us to ask, Optimism about what?

About a decade ago, the techno-optimist narrative began to fall apart.

In 2011 Tyler Cowen, an economist at George Mason University in Virginia, wrote The Great Stagnation, arguing that the technologies that seemed so impressive at the timeespecially social media and smartphone appswere doing little to stimulate economic growth and improve peoples lives. The Rise and Fall of American Growth, a 2016 bestseller by Robert Gordon, another prominent economist, ran to more than 700 pages, detailing the reasons for the slowdown in TFP after 2004. The temporary boom from the internet, he declared, was over.

The books helped kick off an era of techno-pessimism, at least among economists. And in the last few years, problems like misinformation on social media, the precarious livelihoods of gig-economy workers, and the creepier uses of data mining have fueled a broader pessimist outlooka sense that Big Tech not only isnt making society better but is making it worse.

These days, however, Cowen is returning to the optimist camp. Hes calling for more research to explain progress and how to create it, but he says its a more positive story than it was a few years ago. The apparent success of covid vaccines based on messenger RNA has him excited. So do breakthroughs in using AI to predict protein folding, the powerful gene-editing tool CRISPR, new types of batteries for electric vehicles, and advances in solar power.

What is the technology doing for people?

An anticipated boom in funding from both governments and businesses could amplify the impact of these new technologies. President Joe Biden has pledged hundreds of billions in infrastructure spending, including more than $300 billion over the next four years for R&D. The EU has its own massive stimulus bill. And there are signs of a new round of venture capital investments, especially targeting green tech.

If the techno-optimists are right, then our 10 breakthrough technologies for 2021 could have a bright future. The science behind mRNA vaccines could open a new era of medicine in which we manipulate our immune system to transform cancer treatment, among other things. Lithium-metal batteries could finally make electric cars palatable for millions of consumers. Green hydrogen could help replace fossil fuels. The advances that made GPT-3 possible could lead to literate computers as the next big step in artificial intelligence.

Still, the fate of the technologies on the 2001 list tells us that progress wont happen just because of the breakthroughs themselves. We will need new infrastructure for green hydrogen and electric cars; new urgency for mRNA science; and new thinking around AI and the opportunities it presents in solving social problems. In short, we need political will.

But the most important lesson from the 2001 list is the simplest: Whether these breakthroughs fulfill their potential depends on how we choose to use them. And perhaps thats the greatest reason for renewed optimism, because by developing new ways of measuring progress, as economists like Coyle are doing, we can also create new aspirations for these brilliant new technologies. If we can see beyond conventional economic growth and start measuring how innovations improve the lives of as many people as possible, we have a much greater chance of creating a better world.

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Are you ready to be a techno-optimist again? - MIT Technology Review