Strolling through informatics #26 – Does informatics drive growth?

previous #25 ––– next #27

by Enrico Nardelli

(versione italiana qua)

We discussed in the previous post how automation brought by informatics to the world of work needs adequate preparation of people to fully develop its potential. This is especially true for a country like Italy, which has countless productive niches of excellence, for which informatics can enable increased productivity while maintaining high levels of flexibility and adaptability.

As discussed in the four posts starting from this one, the problem is primarily cultural, because information technology is different from all others that preceded it. It creates "cognitive machines," meaning amplifiers of people's rational cognitive abilities and therefore radically different from all machines previously created by humans, which only enhance physical capabilities. After centuries of technological progress, this revolution swept through society in the short span of two decades, too quickly for the leadership class to understand its significance.

However, it's necessary to understand that informatics' capabilities and opportunities truly become a useful factor for building competitive advantage not when solutions are bought turnkey and imposed from above, but when they are developed and grown within the organization, adaptively to the organization's own needs. Only information systems introduced synergistically with organizational reality and its decision-making processes are the key to creating an efficient and effective organization. Finally, it's essential to understand how this has recurring and non-negligible costs, and how it's closely intertwined with the structure and governance of every organization, therefore requiring real awareness and full involvement of the workers concerned.

This is an epochal educational challenge that can only be won with the contribution and dialogue of all interested actors and would also allow for the creation of concrete economic growth opportunities in Italy. Not only because the informatics sector, called computing in the USA, has been that nation's leading sector for new jobs since 2016 (see graph below, created by the Author based on this data) and since 2017, in the manufacturing area, has surpassed demands for production sector workers.

But also because the "wise" use of informatics, which is not the purchase of turnkey solutions (which often work poorly and require continuous adjustments) or relying on external suppliers (generally late and over budget), but is based on development managed (and, in the best cases, even implemented) from within the organization, can give our production system an extra edge.

Italian production in most sectors is characterized by a unique combination of quality and flexibility. In many fields we are the best because we manage to closely follow changing market needs while maintaining a consistently very high quality standard. To continue excelling in this way, it's now necessary to introduce this use, which I've called wise, of informatics in production processes. This is only possible if our educational system produces a sufficient number of technicians and graduates of both sexes, thus also reducing the gender gap that is high in this sector.

All of this will not be possible without adequate knowledge, developed from elementary school desks, of what informatics is and of its "great beauty".

But beware, sometimes it happens that the benefits from productivity improvement attributable to informatics automation are not equitably distributed. This situation is illustrated by the graph in the figure below, an elaboration by the Author on OECD data (Organization for Economic Cooperation and Development). For both productivity and wages, index values were used, taking the value of July 1, 1995 as base = 100. We observe that average wages grew less than productivity, which means that, on average, workers were not compensated in a way corresponding to their greater productivity.

Note particularly the bottom line, since – representing the median value – it implies that, in the set of 24 OECD member countries considered in this survey, the situation went even worse for more than half of the workers, who received an even smaller share of the productivity increase to which they contributed with their work.

In the United States, the divergence between productivity and wages is even greater, as seen in the graph below, also an elaboration by the Author on data from the same time interval from The Economic Policy Institute (EPI), a non-profit institute that studies the needs of low- and middle-income US workers. In the same years, from 1995 to 2013, productivity grew more compared to the OECD average (134.3 versus 130.3), while average wages grew less (114.0 versus 122.8).

Yet, when in the second half of the last century "electronic brains" (as they were called to impress a society that, though industrialized, was still at the dawn of automation) had begun to demonstrate their incredible possibilities for automating many typical human behaviors, hopes that this could bring significant benefits to everyone had spread quickly.

Instead, not only – as the two graphs above highlight – did the majority not gain much from this productivity increase, but the quality of life when we find ourselves interacting with digital services has – in general – worsened (how many times do we lose several dozen minutes, if not entire hours, trying to do something online through an automated service when human communication would have solved the problem in 5 minutes?) and we are losing increasingly large portions of the personal privacy space we enjoyed until a few decades ago. Many don't realize this and consider living in a "glass house" normal, since they "have nothing to hide," without realizing that without privacy there is no freedom and without freedom there is no democracy.

We will continue to discuss this theme of the distance between what we expected from digital automation and what we got in the next post.

[[The posts in this series are based on the Author's book (in Italian) La rivoluzione informatica: conoscenza, consapevolezza e potere nella società digitale, (= The Informatics Revolution: Knowledge, Awareness and Power in the Digital Society) to which readers are referred for further reading]].

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The original version (in italian) has been published by "Osservatorio sullo Stato digitale" (= Observatory on Digital State) of IRPA - Istituto di Ricerche sulla Pubblica Amministrazione (= Research Institute on Public Administration) on 2 April 2025.