ECONOMIC REPORT OF THE PRESIDENT

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Figure 5-13 Robot Density: Automotive vs. Non-Automotive, 2012 Number of Robots per 10,000 Workers 1,750 1,562 1,500 Automotive Average 1,250 1,133 1,091 Non-Automotive 1,000 750 500 332 273 219 213 250 147 135 76 20 11 0 Japan Germany United States China Source: Axium Solutions; International Federation for Robotics. Number of Patents 400 350 300 250 200 150 100 50 Figure 5-14 Patents with Robot Class, 2000–2014 Percent of All Patents Granted Share of All Patents 0.13 2014 (right axis) 0.12 Number of Patents (left axis) 0.11 0.10 0.09 0.08 0.07 0.06 0 2000 2002 2004 2006 2008 2010 2012 2014 Source: United States Patent and Trademark Office. 0.05 Technology and Innovation | 235
was relatively flat through the 2000s, before starting to increase in 2012. There were close to 350 robotics patents granted in both 2013 and 2014, as compared to an average of about 150 in the 2000s. As also indicated in Figure 5-14, the share of patents that are for robotics decreased from 2006 to 2010 before starting to increase from 2011 to 2014. CEA also conducted an analysis of patent ownership and found little evidence of concentrated ownership across industries. However, robotics are used differently across industries, and so it is unclear whether there is a concentration of patent ownership within different industries. Going forward, it will be important to be vigilant about intellectual property related to robotics. Low concentration in upstream markets implies healthy competition, which should lead to more innovation and lower prices. As a result, downstream firms should be able to acquire robot inputs at competitive prices, which should help to drive productivity growth even further. Effect of Robotics on Workers While industrial robots have the potential to drive productivity growth in the United States, it is less clear how this growth will affect workers. One view is that robots will take substantial numbers of jobs away from humans, leaving them technologically unemployed—either in blissful leisure or, in many popular accounts, suffering from the lack of a job. Most economists consider either scenario unlikely because several centuries of innovation have shown that, even as machines have been able to increasingly do tasks humans used to do, this leads humans to have higher incomes, consume more, and creates jobs for almost everyone who wants them. In other words, as workers have historically been displaced by technological innovations, they have moved into new jobs, often requiring more complex tasks or greater levels of independent judgment. A critical question, however, is the pace at which this happens and the labor market institutions facilitate the shifting of people to new jobs. As an extreme example, if a new innovation rendered one-half of the jobs in the economy obsolete next year, then the economy might be at full employment in the “long run.” But this long run could be decades away as workers are slowly retrained and as the current cohort of workers ages into retirement and is replaced by younger workers trained to find jobs amidst the new technological opportunities. If, however, these jobs were rendered obsolete over many decades then it is much less likely that it would result in largescale, “transitional” unemployment. Nevertheless, labor market institutions are critical here too, and the fact that the percentage of men ages 25-54 employed in the United States slowly but steadily declined since the 1950s, as manufacturing has shifted to services, suggests that challenges may arise. 236 | Chapter 5
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ECONOMIC REPORT OF THE PRESIDENT To
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C O N T E N T S ECONOMIC REPORT OF
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economic report of the president To
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when a hardworking American loses h
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the annual report of the council of
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C O N T E N T S CHAPTER 1 INCLUSIVE
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CHAPTER 5 TECHNOLOGY AND INNOVATION
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APPENDIXES A. Report to the Preside
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3.4. Percent Gap Between Actual and
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6.6. Relationship between Output Gr
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C H A P T E R 1 INCLUSIVE GROWTH IN
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To promote inclusive growth, both c
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Percent 20 15 Figure 1-1 Share of I
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Table 1-1 Increase in Income Share
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Figure 1-3 Distribution of Househol
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narrows the pool of human capital t
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over the past several decades has b
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Figure 1-6a The "Great Gatsby Curve
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Figure 1-7 Change in Employment by
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and sellers—consumer and producer
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Percent 15 10 Figure 1-9 Corporate
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Percent 30 Figure 1-11 Share of Wor
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Figure 1-12 Real Construction Costs
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promoting equality of opportunity;
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the division of rents, they can red
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C H A P T E R 2 THE YEAR IN REVIEW
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cold weather.1 The economy rebounde
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Box 2-1: Impact of Oil Price Declin
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Roughly speaking, the decline in th
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Percent of GDP 10 Figure 2-3 Federa
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Figure 2-5 Government Purchases as
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13 percent of GDP. Until 1990, Stat
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of new purchases.2 The increase in
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Figure 2-8 Actual and Consensus For
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Figure 2-10 Rates of Part-Time Work
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less than a tenth of the overall de
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Business fixed investment grew 3.1
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Percent 10 Figure 2-14 Personal Sav
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BEA revises the official statistics
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Index* 100 Figure 2-16 Real Income
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Box 2-5: Are Official Estimates of
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of consumer surplus, which should,
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Figure 2-19 National House Price In
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Box 2-6: Constraints on Housing Sup
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and also was estimated in recent re
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market. Nevertheless, the construct
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Figure 2-23 Net Investment as a Sha
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Percent 80 Figure 2-25 Total Payout
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Figure 2-28 Foreign Real GDP and U.
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Figure 2-30 Sources of Productivity
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Figure 2-32 Nominal Wage Growth Ove
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Figure 2-35 Long-Term Inflation Exp
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Percent 18 Figure 2-36 Nominal 10-Y
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Table 2-1 Selected Interest Rates,
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are close to those projected by the
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International Economics (Petri and
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History Forecast 1953:Q2 to 2015:Q3
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inflation up to 2007 and then expec
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Upside and Downside Forecast Risks.
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earlier forecasts. Figure 3-1 shows
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Real GDP/WAP Growth 2011-2014 Figur
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economists would expect capital dee
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Figure 3-i Actual and Forecasted Wo
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affected the demographic trajectory
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over the first three quarters of 20
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Percentage Points 35 30 Figure 3-7
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the President for a discussion of t
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Box 3-2: Market Volatility in the S
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potential for rapid spillovers betw
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absorb unexpectedly high losses. In
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Box 3-3: Commodity Prices and Infla
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In November 2015, the IMF voted to
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Billions of U.S. Dollars 250 200 15
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U.S. exports are 12.5 percent of th
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Box 3-4: The Importance of the Tran
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The challenging environment for U.S
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child’s environment. Despite the
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and Rossin-Slater 2015).5 These adv
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Figure 4-2 Official Poverty Rate fo
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Figure 4-3 Likelihood of Scoring Ve
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Percent 100 90 80 70 60 50 40 30 20
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Figure 4-7 Achievement Gap is Large
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Hours per Week 24 22 20 Figure 4-9
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Percent 65 Figure 4-11 Preschool En
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Box 4-1: Gender Differences in Earl
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Card and Rothstein 2007; Dickerson
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depend on how parents choose to inv
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y many factors, which makes it diff
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Box 4-3: Federal Early Childhood Pr
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program served over 45 million Amer
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Reauthorization Act of 2015, signed
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Page 209 and 210: Figure 4-20 Increase in Probability
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Page 213 and 214: Figure 5-1 Labor Productivity Growt
Page 215 and 216: Competition and Dynamism Play a Cri
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Page 219 and 220: Figure 5-2 Quantity and Volume of V
Page 221 and 222: Box 5-2: Occupational Licensing One
Page 223 and 224: in consumer welfare as they erode t
Page 225 and 226: Finally, some workers may acquire s
Page 227 and 228: Box 5-3: Major Research Initiatives
Page 229 and 230: Figure 5-5 Federal and Nonfederal R
Page 231 and 232: Figure 5-7 Federal Research and Dev
Page 233 and 234: Figure 5-10 Percent of Patent Appli
Page 235 and 236: percent of all cases in 2009 to ove
Page 237 and 238: (Bloom, Sadun, and Van Reenen 2012)
Page 239: Figure 5-12 Estimated Annual Shipme
Page 243 and 244: In contrast, recent papers by Autor
Page 245 and 246: services, such as 4G LTE. At the sa
Page 247 and 248: Box 5-5: The On-Demand Economy “O
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Page 251 and 252: Figure 5-17 Household Income and Ho
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Page 256 and 257: C H A P T E R 6 THE ECONOMIC BENEFI
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Page 260 and 261: Figure 6-1 Composition of Public Sp
Page 262 and 263: Age, Years 29 27 Figure 6-3 Average
Page 264 and 265: Type CAN FRA DEU ITA JPN GBR USA 20
Page 266 and 267: Box 6-1: Clean Energy and Transport
Page 268 and 269: Industry Government Investment Dire
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Page 272 and 273: Box 6-2: Elasticity of Output to Pu
Page 274 and 275: and output ignore potential inter-t
Page 276 and 277: Thus, ideas are exchanged, workers
Page 278 and 279: kilometers of road) in 1983 resulte
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Page 282 and 283: Figure 6-6 Relationship between Out
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Page 286 and 287: user fees or shadow tolls.11 Throug
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Tax-Exempt Bonds Transportation inf
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Recent Legislation In December 2015
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enefit freight movements. The Act a
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C H A P T E R 7 THE 70 TH ANNIVERSA
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and composition of the labor force,
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it, “[t]he CEA and its chairman h
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jected reductions in the deficit. I
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example, the Environmental Protecti
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Keyserling and the Council particip
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Countercyclical Policy in Other Adm
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In designing the Recovery Act, one
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incorporating risk and discounting
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and Freddie had lots of friends in
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(USEC). USEC was responsible for pr
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can be reported to him as the perce
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By contrast, Keyserling had activel
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goals of the government in their ar
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Gather, Analyze, and Interpret Info
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the unemployment insurance system w
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an informational basis for appropri
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had experience working in governmen
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emained. I joined forces with Budge
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Of course, relying on short-term ac
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Carson, Ann. 2015. “Prisoners in
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Kleiner, Morris M. and Alan B. Krue
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Congressional Budget Office (CBO).
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Kocin, Paul J. and Louis Uccellini.
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Fajgelbaum, Pablo and Amit Khandelw
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World Bank. 2016. “Global Economi
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Belfield, Clive R., Milagros Nores,
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Campbell, Jennifer A., Rebekah J. W
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Council of Economic Advisers. 2014.
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Eissa, Nada and Jeffrey B. Liebman.
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Hastings, Justine S. and Ebonya Was
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Kalil, Ariel, Rebecca Ryan, and Mic
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Maxfield, Michelle. 2013. “The Ef
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Olds, David, John Eckenrode, Charle
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Solon, Gary. 1992. “Intergenerati
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Wherry, Laura R., Sarah Miller, Rob
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Bloom, Nicholas, Mark Schankerman,
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Graham, Stuart JH, Cheryl Grim, Tar
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Melitz, Marc J. 2003. “The Impact
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______. 2015. “Patent Assertions:
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Congressional Budget Office. 2009.
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Peshkin, David G., Todd E. Hoerner,
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______. 2001. Designing U.S. Econom
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Krueger, Alan B. 2000. “Honest Br
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Weidenbaum, Murray L. 1983. “An E
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letter of transmittal Council of Ec
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Council Members and Their Dates of
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The Members of the Council Sandra E
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In May, the Council issued a report
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Nirupama S. Rao . . . . . . . . . .
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Jessica Schumer resigned from her p
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C O N T E N T S GDP, INCOME, PRICES
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General Notes Detail in these table
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Table B-1. Percent changes in real
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Table B-2. Gross domestic product,
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Table B-4. Growth rates in real gro
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Year or quarter Total Table B-6. Co
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Table B-8. New private housing unit
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Table B-10. Changes in consumer pri
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Table B-11. Civilian labor force, 1
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Year or month Table B-13. Unemploym
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Table B-14. Employees on nonagricul
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Year or quarter Table B-16. Product
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Table B-18. Federal receipts, outla
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Table B-20. Federal receipts, outla
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Table B-22. State and local governm
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End of month Table B-24. Estimated
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Table B-25. Bond yields and interes
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