The next productivity burst

I regularly speculate on the source of the great American productivity burst that fueled the longest growth period in America from 1989 to 2000 and then again from 2001 to today. My thinking about productivity is based on my intimate connection with hundreds and hundreds of businesses of all sizes.

For the earlier period I am comfortable explaining productivity growth based on FedEx, UPS, telephone answering machines, email, Starbucks, laptop computers, international fiber-optic cables, Microsoft Office, and web browsers. For the second period I lean toward ubiquitous cell phones, leveraged buyouts and Google.

Looking at the immediate future the most important source of productivity I see are Internet social networks.  In the Bay Area there is Linkedin and for the U.S. there is Facebook.

Why? Two reasons: First, all important commercial life is built around social networks and any facilitation of this networking reality is productive.  Second, Americans (and Israeli's) are the most socially open, gregarious and friendly people on the planet. So improvements in social networking will re-downed particularly to American business.

Keep your eyes open.  Will we see the GNP and profits continue to climb for the next five years? I think so.