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On the Complicated Economics of Attention Capital

November 30th, 2017 · 30 comments

A Serious Consideration

In recent years, I’ve occasionally tackled an intriguing question: are distracting technologies partially to blame for our economy’s sluggish productivity numbers?

I’m often tentative about addressing this topic because I’m not an economist, and serious economists seem to have other explanations in mind (c.f., this column or this book).

This is why I was pleased when many of you forwarded me an article titled: “Is the economy suffering from the crisis of attention?” It’s written by Dan Nixon, a (serious) economist at the Bank of England.

In this article, Nixon explores the question I asked above. In doing so, he outlines two main “channels” through which the new technologies of the Network Age might impact economic productivity indicators:

  • Channel #1: These technologies can distract employees from their actual work. If you spend less time working, and more time skimming your Facebook newsfeed, you get less done.
  • Channel #2: These technologies can directly and permanently reduce the rate at which employees produce value using their brains. If your workflow requires you to constantly check emails, then your ability to create new value is dampened.

My suspicion is that the second channel is the main culprit. As I’ve argued before (c.f., this article I wrote for HBR.org), the front office IT revolution, in which we hooked knowledge workers together with high-speed communication networks, has been a mixed blessing.

We assumed that slow communication and inadequate information was a primary bottleneck for knowledge work. But reality proved more complicated. As we’re learning, extracting a good return on investments in “attention capital” (to use a term from Nixon) requires that you balance two things:

  • providing your employees’ brains timely access to the right information; and
  • providing these brains the right conditions under which to process this information effectively.

The front office IT revolution has focused almost exclusively on the first item from this list by prioritizing faster networks and more efficient communications tools — a movement that has reached an apex in our current age of ubiquitous mobile access to all people and all information.

And yet, even though we’ve pushed connectivity to daring new levels — a technological miracle built on numerous ingenious innovations — we haven’t become more productive. In fact, the better these tools get, the less productive we become! (See the above chart, which is from Nixon’s article).

A Tricky Balance

The problem, I conjecture, is that focusing exclusively on the first item from my list has generated a perverse counteraction: not only does it steal our attention from the equally important emphasis on optimizing cognitive operating conditions, it actually makes these conditions worse. The result: productivity stagnates.

I increasingly believe that it’s exactly this dynamic that makes it so hard to figure out how to make effective use of attention capital.

If we ignore the conditions in which we expect brains to produce value, we cannot expect productivity to increase. At the same time, if we focus only on enabling deep thinking, these brains might not have the right information to think about, also hurting productivity.

Figuring out this balance is perhaps the most pressing question concerning continued growth of the knowledge work sector.

Or maybe it’s not. Which brings me back to Dan Nixon. What I especially like about his article is that he ends with a call for serious experimentation to get to the bottom of these issues.

“Ideally we would want to observe directly how ‘attention capital’ and productivity vary across firms and over time,” he writes.

I agree. Writers like me have been pontificating cleverly on these issues for years, but real progress will require more data.

Hopefully there are some economists out there ready to take on Dan Nixon’s challenge.

#####

Speaking of attention capital, one of my favorite start ups, Mouse Books, just announced a Kickstarter campaign for their holiday edition. The perfect gift, in my opinion, for the deep thinker in your life.

30 thoughts on “On the Complicated Economics of Attention Capital

  1. Nenad says:

    Putting two parameters on a graph does not show causation. From this graph you can conclude whatewer you wish. For example you have concluded that “Channel #2: These technologies can directly and permanently reduce the rate at which employees produce value using their brains. If your workflow requires you to constantly check emails, then your ability to create new value is dampened.”. I submit to you that inclustion of Microsoft Outlook in corporate environments in early 2000s correlates with spike in productivity not seen since mid seventies. And of course it does not mean that constant email notifications from Outlook caused this increase. Just pointing out the obvious – your argument is invalid.

    1. Peter says:

      Nenad, Cal is not claiming that the graph alone proves causation (as he acknowledges, he’s not an economist). And, respectfully, there is plenty of research that has found that constant email notifications increases distractions and fragments employees’ attention:

      https://www.forbes.com/sites/davidburkus/2016/04/06/how-email-made-you-less-productive/#7ca8a44c325d

    2. Randolph says:

      “Putting two parameters on a graph does not show causation.”

      You know, unless it does. It seems there is more than one graph here, there is about 3,000 words supporting his stance on this issue.

    3. Bill Babcock says:

      Yup. I don’t see any support for the argument though I’m disposed to believe it. I hate seeing people in some interesting and exciting environment walking around with their head down over their devices or taking pathetic selfies with their stock poses (lips pursed, head tilted, wide eyes. Ugh). But anything other than a gut feel and general aversion requires substantiation. Relatively pointless article other than venting.

    4. John Thomas says:

      Based on your standards, so is the argument supporting anthropological global warming.

  2. Arnob Endry says:

    For example you have concluded that “Channel #2: These technologies can directly and permanently reduce the rate at which employees produce value using their brains. If your workflow requires you to constantly check emails, then your ability to create new value is dampened.”.

  3. kathleen says:

    All I know is that when I took FB and Twitter off my cell phone, my productivity skyrocketed. n of 1. Study ongoing. Analysis of data did not require Python.

  4. John says:

    The only parallel in that graph is because the 2007/2008 financial crisis happened to hit at around the time the iphone came out. It’s a coincidence. We know it was sub-prime mortgages and weak regulations, not smartphones that caused it. After all, the shipment of smartphones continued to increase over the years while the growth graph is seemingly doing its own thing.

    I’m with you about the value of reducing distractions in our lives so that people can focus, but I don’t really think smartphones are ruining our economy.

  5. Mike Kelley says:

    I understand the premise, and I agree with the conclusions to a degree. However, I don’t think the author takes the analysis far enough. I think our distraction with technology is symptomatic of a much deeper problem. In my personal experience, most workers just don’t care. There’s no real motivation to be productive, and in many companies I’ve worked for, there is great motivation against productivity. For example, I have worked on many projects where management actively suppressed progress for budgetary reasons. This actively encourages noon-productive habits in the workers. I believe we must identify and address the underlying problems, and I don’t believe technology is the root cause here.

  6. Dick Hoelcher says:

    Try this – increased access to information anywhere and everywhere led to people asking questions about improper credit ratings and the true value of CDOs. Once everything lost value, smartphones provided the poor and ‘middle-class’ a window on to the rest of the world. They couldn’t help but ask why they were forced to bear the brunt of economic ruin, while the wealthiest took the profits of their labor and gave a mere pittance in return.

    The profit takers refused to answer and refused to motivate.

  7. Jeff H. says:

    I’d also be interested in the relationship between productivity and the number of hours people work. I get a sense that many employees understand the true time it takes to complete their work as well as the amount of work they have to do and thus a lot of time is spent procrastinating. Would be great to see your ideas studied across countries with different working hours and expectations.

    1. Maren says:

      He actually mentioned it in his book, called Deep Work. I highly recommend you to read it.

  8. wow says:

    I’m pretty sure the drop in productivity on the chart there is because of the 2008-2009 Global Financial Crisis and not smartphones…. Millions were unemployed, large companies & institutions went bust.

  9. Stuart Hughes says:

    Cal, would you extend this to new business innovation? There’s plenty of books around on idea generation but I wonder if they miss the point that we are now so distracted that we can’t think long and deep enough to let these ideas flourish.

  10. Regit says:

    Pretty sure managements increased ability to micromanage thanks to IoT and newer technology are what’s causing the most problems, more and more middle and upper management are having to justifying jobs that rightfully can be done away with.

  11. Michael says:

    I can say that I absolutely agree with this but it is not just productivity it is actual innovation. Not fin-tech innovation or innovation that comes from agreeing on data or paper trails but real innovative and visionary thought. The stuff the internet and all of the technologies were built on that we use today.

    However the internet builders were born pre-internet just right on the edge. This generation had far less distractions and could focus in on one or 2 tasks for lengthy periods of time. Today with all the absurd level of distraction and how prolific the infrastructure for these distractions are today overall focus is being damaged to a great degree. I would go as far to say that brains are potentially being damaged because of the distraction and overload in the attention economy.

    We are going to see this as some new disorders they start attributing to the newer generations. Both channels you point to are not being dealt with. Because the idea of what information is important to each brain is being handled more and more by AI systems that are coded by a handful of people. These handful of people or more than a handful are generally not in touch on a psychological level with whom they are coding the AI for. We are losing a general ability to cross communicate in this age yet we have an abundance of communication tools. That of course is because of the goal of exploding short term balance sheets. Which as we have seen can now be artificially exploded by speculation or other illusion finance. So having actual human bodies will eventually except for a select number become an unneeded redundancy.

    In addition to what has been posted here the chemical overload from the insane influx of info on a constant basis will eventually show up as damaged receptors in the brain. As it is the multi tasking of today (online checking emails etc.) releases certain happy chemicals. This leads to a dependence because the natural slower creation of these chemicals is no longer occurring. Thus far this already is creating or has been attributed to depression and other mental health issues with newer generations.

    Eventually we will see areas of the brain become damaged while others will become more active. However like other imbalances it will not be a positive long term outcome for the biological life-form known as human. We will need to continually add in new augments just to keep pace and not naturally burn out.

  12. I grant that their is some truth in the assertions here, but we should be careful not to jump to Luddite conclusions. I prefer to believe that we have not yet learned how to use modern communications properly, but we can and will. Information and awareness flood over us today. It is time to learn to swim, not to run to dry land. My own experience is that I have trained myself to become much better at negotiating and informed world as I have recognized the effects of distraction.

  13. Joe Bentzel says:

    “Attention capital” has been subject to inflationary pressure by digital marketers return to non-permissioned interruption marketing–up to and including the toxic approach called “neuromarketing”, i.e. emotional manipulation of users via UX gimmicks and other headgames.

    Additionally, the millennial digital workforce came to the workforce as digital consumers and not as producers, and they have actually cultivated a values system that “supports” their lack of attention and defends it against attempts to rein in non-productive digital monkey business..

    It’s going to get a lot worse before it gets better. Will read the Nixon article.

  14. http://calnewport.com/blog/2017/11/30/on-the-complicated-economics-of-attention-capital/
    The problem (inferred) is complication. The principle here is that – ” The difference between Complexity and Complication is “Free Will” “.

  15. Nick says:

    And the work one needs to survive becomes increasingly boring, or often aggravating, to a normal human brain. Seeking any way possible to escape boredom and stupidity is not surprising, it is expected.

  16. A (serious) person says:

    A (serious) comment for a serious blog post. Good!

  17. Andy James says:

    Smartphone addiction creates imbalance in brain, study suggests
    https://www.sciencedaily.com/releases/2017/11/171130090041.htm

  18. Somi says:

    Dear Dr. Newport, I recently started reading your book on Deep Work. I am in chapter 3 and I am really enjoying this book. I am an average-distracted-shallow computer science programmer who is looking to better self and has a big dream to make our world better for our kids, after realizing about my shallow work habits issue. I have bumped into the right book I feel to fill these gaps in me and end this year strong. So thank you!

  19. Richard says:

    So, there is no empirical data that shows email notifications and other notifications are a distraction and make a person lose concentration?

  20. Anon says:

    I’m pretty sure that most measures of productivity don’t account for advertising revenue — it’s considered an intermediate good in GDP for example — so Google, for example, isn’t included in per capita GDP. Wouldn’t this affect trend estimates?

    (See, for example: https://www.forbes.com/sites/timworstall/2016/10/25/were-doing-gdp-wrong-facebook-and-google-add-zero-to-the-economy/#662390399b99)

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