Marc Andreessen on productivity

This is from a recent interview with Noah Smith:

“First, COVID is the ultimate cover for restructuring — what my friend and former CFO Peter Currie used to call “shake and bake”. It’s an opportunity for every CEO to do all the things he/she may have wanted to do in the past to increase efficiency and effectiveness — from fundamental headcount resizing and reorganization, to changing geographic footprint, to exiting stale lines of business — but couldn’t because they would cause too much disruption. The disruption is happening anyway, so you might as well do everything you’ve always wanted to do now.

Second, it’s hard to overstate the positive shock that remote work works. Remote work isn’t perfect, there are problems, but virtually every CEO I’ve talked to over the last year marvels at how well it works. And remote work worked under the extreme duress of a pandemic, with all of the human impact of lockdowns and children unable to go to school and people being unable to see their friends and extended families. It will work even better out of COVID. Companies of all shapes, sizes, and descriptions are retooling their assumptions on geographic footprint, where jobs are located, where employees are located, how offices are configured, and if there should be offices at all.

Combining these factors, it’s possible that we’ll see a huge surge in productivity growth over the next 5 years. This productivity growth is, in my view, the key to a strong “roaring 20’s” thesis, that we are going to see an amazing economic boom in the US over the next several years, even on top of the incredible boom of 2009-2020. I don’t think that’s a certainty, but I think it’s possible — even likely.”

I’m not sure how well the public sector will capitalise on the productivity growth Marc predicts above. At least in Australia, public sector CEOs act exactly as he describes earlier in the interview, where it’s difficult to “adapt an older culture designed to bend metal, shuffle paper, or answer phones”.

It will eventually adapt by necessity (it’ll be tough to attract staff, even with job security, when private companies offer more pay and remote work) but by the time it does the private sector will be miles ahead. Not that that’s a bad thing, but it’s a shame the opportunity to improve the public sector (15-20% of the total workforce) seems to have, at least anecdotally, dodged the COVID-productivity bullet.