Deregulation allowed, indeed forced, businesses to focus more clearly on a marketplace that has become more competitive, with fewer constraints and increased flexibility. But the dominant force of late appears to have been a significant upshift in the rate of productivity growth.
After increasing 1.6% per year from 1990 to 1995, output per hour in the non-farm business sector - a conventional measure of productivity - has increased at an annual pace of about 2.6% since 1995.