2  BIS Review 12/2004  The never-ending necessity to learn new skills is due to the gradually but inexorably changing nature of our economy. The innovations that have so accelerated productivity in recent years are an extension of a longer-term, ever-growing conceptualization of economic output.
The value added to our GDP from physical material input and manual labor has grown very slowly over the decades.1 By far, the greatest contribution during the past half century to our average annual real GDP increase of 3-1/4 percent has been the ideas embodied in both our human and physical capital.