Technologically savvy immigrants propel high-tech companies in Silicon Valley and elsewhere. And the ever-expanding markets offer the lure of mammoth profits for a successful product that can be sold worldwide. To be sure, the emergence of the 21st Century Economy does not put an end to recessions, financial crises, or the other ills that afflict market economies. Indeed, some of the deepest downturns in American history have come during periods of rapid productivity growth such as the first half of the 1900s. And, as the Asian crisis shows, the global economy exposes countries to risks that they did not face before.
Many economists are skeptical of claims that the sustainable growth rate has permanently increased.
For one thing, they argue that the low inflation of recent years may simply be the result of a few lucky events, including falling oil prices, rather than any permanent structural change. Most important, they say, government economic statistics do not yet present a clear-cut case that technological progress has accelerated. The biggest productivity gains have come only since 1995, which means that a few bad years could still easily wipe them out. The experience of the 1970s and 1980s gives some weight to this lack of faith in technology. The productivity slowdown was caused in large part by the failure of some innovations to live up to their early promise.