Despite its starring role in business and everyday life, many economists openly question whether technology is visible in traditional economic metrics such as GDP, productivity, and corporate profits.
The Boston Consulting Group (BCG) shows that, on the contrary, declines in technology investment are followed by startling drops in all these measures of economic growth. Whenever companies cut back on technology spending in order to shore up profits—as companies in many industries are doing now—profits plunge. GDP also falls dramatically. Within a few years, labor productivity across the economy falls, as well.