Spreading deductions for research investments across five years instead of one is an innovation killer.
Silicon Valley has been alternately deified and demonized for two decades. Cheerleaders laud it for innovation and rapid technological change. Critics lament the social costs associated with such rapid development.
Productivity data tell a nuanced story: Since 2005, total factor productivity growth—that is, productivity growth driven by technological change—has been slow in the U.S., with high-tech industries such as computer design and production, as well as software development, the rare bright spots.
But so far in 2023, these industries have been struggling, with substantial layoffs at big tech companies.
This is a preview of our full op-ed originally published in The Wall Street Journal.
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