So in reference to a discussion Hank, Professor Smitka and myself almost got into two classes ago I wanted to bring up the idea of economic growth in relation to technology. What Hank and I were questioning in class was more or less the role of technology in increasing Economic Growth. The failure of this position is determining how much technology really improves productivity thus increasing economic growth. This position has been bothering me since then. And I’ve been really driven crazy over it to the point of looking stuff up about it in class (to which I apologize professor). However, one of the latest Noahpinion posts really struck a cord with me. The post, entitled “Murphy’s Law? or, Follies of a Finite Physicist” is a must read. [continue reading]
In part of the piece that Noah suggests with sarcasm he is not done with the idea of virtual reality and its relation to growth. The idea here is that as technology grows and we increase the reality of virtual worlds we can create and simulate worlds with goods cheaper to produce but still as desirable as those goods in the real world. Not to mention that said goods would be a renewable resource. The economic growth of such worlds is unpredictable at the moment, but looking at such growth possibilities in juxtaposition with games like World of Warcraft and Second Life certainly enhances our understanding of what such simulated worlds might work and feel like.
These worlds may not just be for people who game or spend countless hours on the internet either. Our phones as well as our purchasing habits are increasingly moving to strictly cyber interactions. A day is coming when more goods will be purchased online than in stores. Our phones are becoming mobile computers allowing for cyber social interactions anywhere at anytime. My point here is not to speculate on science fiction but to address the value of such technology on productivity and eventual economic growth.
Perhaps the iphone only increases productivity on the margin but in the long run technology may be moving not to increase productivity but to invent complete new sets of goods thus creating demand that won’t be have the same limitations as present goods and services.
Again apologies if this is too theoretical and does not seem Japan related enough. The relation to Japan is that of the top 25 largest gaming and software companies in the world 9 are Japanese companies. The potential for these companies who are already investing the resources and have the infrastructure to move into the virtual reality world is enormous. Finally, the virtual markets are global and Japan won’t be hurt in these industries by a fatiguing population so long as Japan is still producing software engineers or make attractive enough offers to entice engineers away from rival companies in China. The third largest Game and software producer after the United States.
(To be fair there are companies focussed purely on virtual reality products but I feel its more fair to include gaming and software companies in this post because they are the companies that are attentive to the wants and desires of the actual market and will purchase whatever technology they don’t develop on their own. Assuming such technology does get developed.)