Imaginative people - not geeks - will lead the way
We are now in the early stages of a third Industrial Revolution – the information age. The cheap and easy flow of information around the globe has vastly expanded the scope of tradable services, and there is much more to come.
The old assumption that if you cannot put it in a box, you cannot trade it is hopelessly obsolete. Because packets of digital information play the role that boxes used to play, many more services are now tradable and many more will surely become so.
In the future, and to a great extent already, the key distinction will no longer be between things that can be put in a box and things that cannot. Rather, it will be between services that can be delivered electronically and those that cannot.
Many people blithely assume that the critical labor-market distinction is, and will remain, between highly educated (or highly skilled) people and less-educated (or less skilled) people – doctors versus call-center operators, for example.
The supposed remedy for the rich countries, accordingly, is more education and a general “upskilling” of the workforce. But this view may be mistaken.
The critical divide in the future may instead be between those types of work that are easily deliverable through a wire (or via wireless connections) with little or no diminution in quality and those that are not.
Adam Smith wrote “The Wealth of Nations” in 1776, at the beginning of the first Industrial Revolution. Although Smith’s vision was extraordinary, even he did not imagine what was to come.
It has been estimated that in 1810, 84 percent of the U.S. workforce was engaged in agriculture, compared to a paltry 3 percent in manufacturing.
By 1960, manufacturing’s share had risen to almost 25 percent and agriculture’s had dwindled to just 8 percent. (Today, agriculture’s share is under 2 percent.)
How and where people lived, how they educate their children, the organizations of business, the forms and practices of government, all changed dramatically in order to accommodate this new reality.
Then came the second Industrial Revolution, and jobs shifted once again – this time away from manufacturing and towards services.
This trend is worldwide and continuing.
Between 1967 and 2003, according to the Organization for Economic Cooperation and Development, the service sector’s share of total jobs increased by about 19 percentage points in the United States, 21 percentage points in Japan, and roughly 25 percentage points in France, Italy, and the United Kingdom.
Industrial Revolutions are big deals. And just like the previous two, the third Industrial Revolution will require vast and unsettling adjustments in the way Americans and residents of other developed countries work, live, and educate their children.
The United States and other rich nations will have to transform their educational systems so as to prepare workers for the jobs that will actually exist in their societies. Basically, that requires training more workers for personal services and fewer for many impersonal services and manufacturing.
But what does that mean, concretely, for how children should be educated? Simply providing more education is probably a good thing on balance, especially if a more educated labor force is a more flexible labor force, one that can cope more readily with nonroutine tasks and occupational change.
However, education is far from a panacea, and the examples given earlier show that the rich countries will retain many jobs that require little education. In the future, how children are educated may prove to be more important than how much.
Contrary to what many have come to believe in recent years, people skills may become more valuable than computer skills. The geeks may not inherit the earth after all – at least not the highly paid geeks in the rich countries.
Creativity will be prized. Thomas Friedman has rightly emphasized that it is necessary to steer youth away from tasks that are routine or prone to routinization into work that requires real imagination.
Unfortunately, creativity and imagination are notoriously difficult to teach in schools – although, in this respect, the United States seems to have a leg up on countries such as Germany or Japan. Moreover, it is hard to imagine that truly creative positions will ever constitute anything close to the majority of jobs. What will everyone else do?
The future retains its mystery. But in any case, offshoring will likely prove to be much more that just business as usual.
Written by Alan S. Blinder, a Gordon S. Rentschler Memorial Professor of Economics at Princeton University. He served on the White House Council of Economic Advisers from 1993 to 1994 and as vice chairman of the Board of Governors of the Federal Reserve from 1994 to 1996.
This article appeared in The Ashahi Shimbun, an English Japanese paper on Tuesday, March 28, 2006.
Property in Observatory, Cape Town, South Africa on http://www.hotpropertyincapetown.com
The old assumption that if you cannot put it in a box, you cannot trade it is hopelessly obsolete. Because packets of digital information play the role that boxes used to play, many more services are now tradable and many more will surely become so.
In the future, and to a great extent already, the key distinction will no longer be between things that can be put in a box and things that cannot. Rather, it will be between services that can be delivered electronically and those that cannot.
Many people blithely assume that the critical labor-market distinction is, and will remain, between highly educated (or highly skilled) people and less-educated (or less skilled) people – doctors versus call-center operators, for example.
The supposed remedy for the rich countries, accordingly, is more education and a general “upskilling” of the workforce. But this view may be mistaken.
The critical divide in the future may instead be between those types of work that are easily deliverable through a wire (or via wireless connections) with little or no diminution in quality and those that are not.
Adam Smith wrote “The Wealth of Nations” in 1776, at the beginning of the first Industrial Revolution. Although Smith’s vision was extraordinary, even he did not imagine what was to come.
It has been estimated that in 1810, 84 percent of the U.S. workforce was engaged in agriculture, compared to a paltry 3 percent in manufacturing.
By 1960, manufacturing’s share had risen to almost 25 percent and agriculture’s had dwindled to just 8 percent. (Today, agriculture’s share is under 2 percent.)
How and where people lived, how they educate their children, the organizations of business, the forms and practices of government, all changed dramatically in order to accommodate this new reality.
Then came the second Industrial Revolution, and jobs shifted once again – this time away from manufacturing and towards services.
This trend is worldwide and continuing.
Between 1967 and 2003, according to the Organization for Economic Cooperation and Development, the service sector’s share of total jobs increased by about 19 percentage points in the United States, 21 percentage points in Japan, and roughly 25 percentage points in France, Italy, and the United Kingdom.
Industrial Revolutions are big deals. And just like the previous two, the third Industrial Revolution will require vast and unsettling adjustments in the way Americans and residents of other developed countries work, live, and educate their children.
The United States and other rich nations will have to transform their educational systems so as to prepare workers for the jobs that will actually exist in their societies. Basically, that requires training more workers for personal services and fewer for many impersonal services and manufacturing.
But what does that mean, concretely, for how children should be educated? Simply providing more education is probably a good thing on balance, especially if a more educated labor force is a more flexible labor force, one that can cope more readily with nonroutine tasks and occupational change.
However, education is far from a panacea, and the examples given earlier show that the rich countries will retain many jobs that require little education. In the future, how children are educated may prove to be more important than how much.
Contrary to what many have come to believe in recent years, people skills may become more valuable than computer skills. The geeks may not inherit the earth after all – at least not the highly paid geeks in the rich countries.
Creativity will be prized. Thomas Friedman has rightly emphasized that it is necessary to steer youth away from tasks that are routine or prone to routinization into work that requires real imagination.
Unfortunately, creativity and imagination are notoriously difficult to teach in schools – although, in this respect, the United States seems to have a leg up on countries such as Germany or Japan. Moreover, it is hard to imagine that truly creative positions will ever constitute anything close to the majority of jobs. What will everyone else do?
The future retains its mystery. But in any case, offshoring will likely prove to be much more that just business as usual.
Written by Alan S. Blinder, a Gordon S. Rentschler Memorial Professor of Economics at Princeton University. He served on the White House Council of Economic Advisers from 1993 to 1994 and as vice chairman of the Board of Governors of the Federal Reserve from 1994 to 1996.
This article appeared in The Ashahi Shimbun, an English Japanese paper on Tuesday, March 28, 2006.
Property in Observatory, Cape Town, South Africa on http://www.hotpropertyincapetown.com
posted by Werner Property Agents at 8:43 pm
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