TrendMacro conversation with Brian Potter on the origins of efficiency -- the birthplace of productivity

Productivity growth arises from improvements in efficiency in the production of goods are services, and the expansion of efficiencies into the future based on learning from the past. Technological advances are only one small part of efficiency. Just as important are process-management aspects including reduction of input costs, economies of scale, removal of steps, reduction of variability and minimization inventory accumulation. As process undergo transformations toward efficiency, they follow an "S-curve," starting from a low base where the process is barely economically viable, then accelerating into sudden profitability as improvements are discovered and implemented, and then settling out into stagnation once the last efficiency is discovered. But often an entirely new version of the process is introduced that obsoletes the earlier one, laying a new "S-curve" on top of the existing one. Artificial intelligence will speed the process of efficiency growth by focusing more thought on rationalization of processes, and also providing simulation environments in which rapid virtual prototyping can take place to weed out bad ideas and elevate good ones. The data centers and energy infrastructure required to support AI are themselves processes undergoing transformations in efficiency. AI may ultimately be able to bring improvements to efficiency resistant-industries such as construction and health care.