As a result, the statistical measurement system is not fully capturing these critical technology improvements, which are a key source of productivity gains in the IT sector. 8 Many types of logic chips that are now common in everything from cell phones to DVD players have been improving rapidly.
Their prices, however, have not been adjusted for quality and such chips are simply lumped in with "other semiconductors." Because semiconductor prices are often used as a gauge of technological progress-the faster the prices fall, the faster technology is improving--inadequate price measurement may be leading to inadequate assessment of the pace of technological progress.