The Day That Transforms How We Measure Real Economic Growth

Those who have been following my thoughts about GDP over the years know I take issue with its shortcomings in measuring actual consumption. GDP measures primarily based on price and if prices are going down, but the quantity of what’s consumed is going up, the net result paints a far different economic picture.

Case in point: You want to buy a TV with a 75” screen. In years past, this would be no small investment. Today, you can buy a 75” TV for under $500. You can also buy a 4K video camera for under $200, which is about 10% of what it used to be not that long ago.

We’re moving beyond 1080P and 12 megapixels to purchase TVs, phones and cameras that can provide clarity in the picture beyond anything we’ve seen before, but are we paying higher and higher prices to access that level of quality?

No. We are not. We are paying less for more, which goes against the traditional measurement of GDP and poses a challenge for making financial projections. Rather than viewing this scenario as a recession and potential depression due to overproduction, we could just as easily view it as migrating into the future due to positive consumption.

It could even be a combination of both, where production is happening so fast and prices are collapsing, but consumption is also happening at a rapid pace. In which case, many of the traditional “rules” of what makes for a good or bad economy do not apply.

Talman Advantage #7: We Already Know Many People At The Top

The built-in advantage of being a more specialized recruiter for over three decades is that Roy Talman & Associates established many strong relationships with senior leaders in the C-suite and Director level. How do we truly leverage that? Prior to your interview, we can provide you terrific insight on the person’s background, the questions they’re likely to ask you and even a few clues into why prior candidates were likely rejected. A recruiter that equips you with more information in advance of the interview? That just might make all the difference – if you Talk To Talman First.

Inventor Ray Kurzweil, in his estimation of The Singularity (the technological “tipping point” in time in which machines can do what humans do faster, better and without any type of human involvement to achieve this result), thought something like what we’re describing would happen in the grand scheme of things as far as high consumption and high production.

Yet, to the extent of consumption and production that we’re seeing, thanks in large part to AI, one must wonder if the rapid emergence and adoption of AI accelerate Kurzweil’s timeline.

When investor, pioneer and Singularity University founder Peter Diamandis speaks about abundance and Kurzweil speaks about The Singularity, they look at both from a technology point of view – as in the kind of technology that’s more widely accessible. They’ll typically avoid speaking to the economics of that discussion, such as the implication on prices.

Kurzweil’s fundamental theory is the law of accelerating returns, which essentially says that the cost of computing is dropping in half at an accelerating pace. These days I would say it’s not the cost of computing that’s dropping but the cost of computational intelligence.

See, if your software is twice as efficient today as it was a year ago, even if the hardware is the same, your cost of computing is the same result. Overall, by the time you combine AI models and they interact, you’ll arrive at lower costs.

What we’re learning now is that you can have Bard, ChatGPT or Copilot writing code instead of a $150,000 programmer writing code. But wait – before you automatically believe that means layoffs, it doesn’t. In fact, it’s just the opposite.

In our next Tidbit, we’ll speak to a far more optimistic – and realistic – scenario that can play out in which the economy adjusts very fast and companies recognize that, indeed, they can have much more productive employees. We’re talking about the level of a 10X Programmer that does new, more extensive tasks. Not the ones they’ve always done faster.

When people speak about new technologies such as AI and machine learning, they focus on the models themselves. Not on the people who can be transformed in their roles for the better too. We see those possibilities as very real at Roy Talman & Associates, so you should Talk To Talman First. What we’ve recognized over the last several decades at Roy Talman is that the candidate you hire should be not only the best of the best today but also the one who can manage the changes in store for you tomorrow. We have the people, tools and testing resources to help you aim higher for the candidates you deserve – not just the ones currently available.