The Productivity Impact of Moore’s Law

“Computing performance doubles every couple of years” is the popular re-phrasing of Moore’s Law, which describes the 500,000 – fold in crease in the number of transistors on modern computer chips. But what impact has this 50 –
year expansion of the technological frontier of computing had on the productivity of firms?

This paper focuses on the surprise change in chip design in the mid-2000s, when Moore’s Law faltered. No longer could it provide ever-faster processors, but instead it provided multicore ones with stagnant speeds.

Using the asymmetric impacts from the changeover to multicore, this paper shows that firms that were ill-suited to this change because of their software usage were much less advantaged by later improvements from Moore’s Law.
Each standard deviation in this mismatch between firm software and multicore chips cost them 0.5-0.7pp in yearly
total factor productivity growth. These losses are permanent, and without adaptation would reflect a lower long term growth rate for these firms. These findings may help explain larger observed declines in the productivity growth
of users of information technology.

rib Working Paper


After Moore’s Law

The end of Moore’s Law will not mean an end to faster computer applications. But it will mean that performance gains will need to come from the top of the computing stack (software, algorithms, and hardware) rather than from the traditional sources at the bottom of the stack (semiconductor physics and silicon-fabrication technology). In the post-Moore era, performance engineering — restructuring computations to make them run faster — will provide substantial performance gains, but in ways that are qualitatively different from gains due to Moore’s Law. Instead of broad-based improvements on a predictable schedule, gains from performance engineering will be opportunistic, uneven, and sporadic. Tackling performance from the top will produce challenges: software bloat will need to be excised, algorithms will need to be rethought, and hardware will become less general-purpose. Big system components will provide a promising venue for these changes for both technical and economic reasons.