If you were alive in the late 1800s, you would have witnessed one of the most breathtaking waves of innovation in human history. Within a single generation:
It felt like magic — the same way AI feels like magic today.
But here’s the twist:
Despite the excitement, the world saw almost no economic or productivity growth for more than 30 years.
It wasn’t until the 1920s — decades after the invention of electricity — that industrial productivity finally exploded.
This long delay holds a critical lesson for the AI era.
The timeline of electrification is one of the clearest illustrations of how technological revolutions unfold.
Society is mesmerized.
Electricity becomes a symbol of the future.
Despite excitement, economists observed something strange:
Factories using electricity were no more productive than steam-powered factories.
How could that be?
Electricity was cleaner, safer, more reliable — yet output barely improved.
Only when companies redesigned their entire workflows did electricity unlock massive productivity:
Factory productivity increased 50–100% in a single decade.
Electrification didn’t transform the world when it arrived.
It transformed the world when workflows evolved around it.
To understand the delay, we must look at how steam-era factories were designed.
In a steam-powered plant:
When companies “switched to electricity,” they made a fatal mistake:
They replaced the steam engine with an electric motor… but kept the entire workflow the same.
They still had:
They adopted the technology, but kept the mindset.
This is why productivity didn’t improve.
They electrified their machines but didn’t electrify their thinking.
Real productivity gains came when companies asked:
“If electricity lets us design the factory from scratch, how should we design it?”
This led to:
Every machine got its own motor.
Machines could be placed anywhere.
Tasks could be grouped by function, not belt alignment.
Parts moved smoothly between stations.
Machines could coordinate without human force.
This redesign triggered the productivity explosion.
Electricity wasn’t valuable until workflows adapted — the same is true for AI.
Modern AI is mesmerizing.
It automates tasks, assists workers, accelerates analysis.
Yet global productivity numbers remain modest.
Economists ask:
The answer mirrors the electricity era:
AI has been added to old workflows, but workflows haven’t been redesigned.
Examples:
AI is being “plugged into” 20th-century processes.
What’s missing is the 21st-century workflow.
The shift will begin when companies stop asking:
“Where can we insert AI?”
…and start asking:
“How should this entire workflow be redesigned now that AI exists?”
The electricity analogy predicts:
The real AI productivity explosion will not happen in 2025 —
it will happen in the early 2030s.
Right now:
Just like electricity in 1900.
We are in the buildout phase.
The redesign phase comes next — and that’s when AI becomes transformative.
The companies that win the AI decade will be those who:
This is the difference between:
In the next chapter, we move from electricity to the Industrial Revolution, where workforce shifts reveal what AI will do to jobs, skills, and economic classes.
Chapter 6 — Cisco & the Dot-Com Bubble
What Cisco teaches us about bubbles, infrastructure, hype cycles, and why NVIDIA mirrors the same historical pattern.
Chapter 8 — The Industrial Revolution & Workforce Shifts
What the Industrial Revolution reveals about job disruption, new skill classes, wage polarization, and how AI is repeating the same historical patterns.