“In virtually every economy I monitor, business investment has been OK but well below what the standard indicators would suggest and I think a bit like the labour market story where wages have been weaker than most people thought, I think there is something going on with technology.
“The published data says 20 per cent of investment in Australia today is intangible. Unpublished estimates say it should be about a third.”
Mr Yetsenga said investment in “intangibles” – such as software – raised some unknowns about economic impacts.
“You build something with steel and cement, I think we understand what that means,” he said.
“You invest in systems and processes and capability I think that’s quite a different economic story.”
He said the most common question he got from people was whether this would be the first wave of technology that leaves the job market worse off.
“I don’t think so, but I don’t know for sure,” he said. “What I do know is every technology wave is disruptive.
“Living standards for working-class labourers declined for the first 60 years of the industrial revolution but incomes of the richest 5 per cent more than doubled. Sound familiar? Kind of sounds like today in a way.”
Mr Yetsenga cited 2018 research from Alphabeta that found the more technology was included within a job, the less likely that job was to disappear.
He used the invention of the washing machine, which wiped out the domestic servant job market in the US in the early 1900s, as a case study.
“So if you were one of the 500,000 [domestic servants] in 1910 watching the washing machine come down the hallways the correct response was not to unplug it from the wall or wash clothes more quickly,” he said.
“The correct response was to learn as much as you could about the washing machine.”
Hamish Hastie is WAtoday’s business reporter.