In the previous two decades, output per unit of input grew less than a percent per year. Since the mid 1990s, productivity gains have been more than 3 percent per year. Indeed, some of the strongest productivity gains occurred early in the decade, when many production processes did not have sufficient quantities demanded to run at optimum rates.
One explanation for this surge is simple: we exported the use of hands. Then we exported the rote mind activity, even to the point of sending code writing, form filling, and simple diagnostic readings abroad. Even simple reporting (putting press releases into the available space) is likely to have a Bangalore byline. As an economist, I know that such exporting will continue until the earnings abroad are sufficient to overcome barriers to travel here (some constraints, such as transfer costs, must keep qualified people from traveling to the higher paying country). Brilliant politicians, if you erect immigration barriers, more jobs will be exported to overcome the inability to have the human capital migrate here.
