Abstract.The paper examines the (potential) effects of new technologies on productivity and job growth.In particular the nature and causes of the “productivity paradox” are firstly dealt with. Even though the leading edge sectors show higher than average productivity growth, since the early 1970s aggregate productivity measures have declined.This paper examines several possible explanations of this phenomenon, concluding that new technologies and the related issue of organisational, institutional and social change provide the most significant explanation.“Replacing a steam engine with one or more electric motors, leaving the power distribution system unchanged, appears to have been the usual juxtaposition of a new technology upon the framework of an old one…Shaft and belt power distribution systems were in place and manufacturers were familiar with their problems. Turning line shafts with motors was an improvement that required modifying only the front end of the system… As long as the electric motors were simply used in place of steam engines to turn long line shafts, the shortcomings of mechanical power distribution systems