Where to next for the Western economic model?
Depending on who you follow, or what you read, it is frequently stated that we are transitioning from the “Internet”,”Information” or “Digital” age to the “Network” age.
We generally think of adversity striking us as the result of something bad happening, an unfortunate event, an accident, serious illness or the result of criminal action . In the current state of flux in our Western economies, adversity can also be as a result of expected good things not happening to us. In the case of school leavers and university graduates, not being able to find employment, perhaps with the added problem of student loans to repay.
Baby Boomers are faced with sudden unemployment through early retirement, retrenchment and business failures. Savings have been wiped out and pensions reduced.
The more I read about and observe what is happening to the model that has allowed our Western economies to survive and prosper for the last 100 years or so, the more obvious it is that we are entering a period of rapid change. Changes that could be more transformative than some economists and commentators predict.
There are as many ideas and suggestions as there are forecasters, some may prove to be accurate, others less so and still others may be pure fantasy.
There are thousands or articles and millions of words written about the new economy being network driven, a collaborative society with rapid change and innovation being the norm. Suggestions that the era of huge corporations is coming to an end except for those providing utilities – energy and a few other basics.
The Internet has changed much of the way we communicate and do business. It has created new job categories and new industries and will certainly continue to do so. Perhaps more importantly, it has created opportunities for waves of entrepreneurs that we have not seen since the pioneer days in North America, various gold rushes and colonisation of parts of the world in the 17th and 18th centuries.
Tom Peters, the co-author of the 20th century classic management book “In Search of Excellence” recently published a blog post about his thoughts on the future of business in this article “What I’ve Come To Believe”
There are some ideas in the article that you might find surprising, one in particular is his suggestion that men will tend to get businesses started but women will then run them more effectively,
Another article that has a bearing on the changes that are happening is Diane Francis’ review of the book The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business
by author Clay Christenson in the 2 February edition of Financial Post.
The author differentiates 3 types of innovation:
- Disruptive or Empowering
Clearly, to provide jobs in the developed economies, we need another wave of disruptive innovation similar to the invention of railways or the Internet. Not more efficiency innovations which tend to reduce employment or sustaining innovation which leads to substitution by better but similar products but does not increase sales overall..
Another snippet of information was an announcement by a Member of the British Council that there were only about 2500 students studying Mandarin at University level in the United Kingdom. Such is the demand by employers attempting to break into the Chinese market that virtually all but the most inept of those students will be guaranteed well-paying jobs when they graduate.
Contrast that with the over 200 000 British students learning French who will have to compete with an even larger number of English-speaking French students for the few suitable jobs available for students fluent in those two languages..
The choice of which language to study is at first a long way removed from discussions about disruptive innovation, but they and all the other changes our economies are experiencing are part of the real new world order.
China is”Flavour of the month” now, but short of a miracle, sooner or later China will follow Japan, Europe and North America into maturity and stagnation. What then? The Indian economy will not carry the rest of the world even with growth in the next tier of Asian success stories like Indonesia, Vietnam Thailand and perhaps Burma.
The cry of “Adapt or die” has never been more appropriate or more urgent.
The continuing and accelerating wave of change will affect workers, small and large businesses dramatically. From school leavers deciding which , if any, studies to pursue, to older generations seeing jobs and whole industries disappear.
We are already seeing that school leavers opting to learn a trade instead of getting a university degree, have several advantages. More job opportunities, tuition fees are lower and in those trades which accommodate apprentices, students can be earning while learning.
With most trade qualifications, there are opportunities for self employment, starting a small businesses in addition to conventional jobs.
What if there was a concerted effort to expand the apprentice system into commerce, the arts, perhaps some levels of medicine? The last is tricky, I would not want an apprentice performing surgery on my brain, but nurses and technicians already perform some procedures that were previously restricted to doctors.
What if the price of food was allowed to increase to a degree that restored the traditional family farm to a level of profitability that could sustain a family? Or better, provide employment to a few others. That could provide a safety net for those people losing manufacturing jobs in sunset industries.
What if job sharing was encouraged and red tape reduced so that it was easy for people to work a few hours a week for each of several different employers and perhaps develop some form of self employment as well.
Will the new order encourage nationalism and new measures to protect domestic industry? Will immigration policies become less restrictive in countries with ageing populations to balance the costs of unproductive seniors? Or more restrictive to preserve scarce jobs for citizens.
Whatever happens in the next years and decades is going to have a huge impact on all of us. There will be plenty of both opportunity and adversity. Those of us who survive and prosper will be the ones who have more than one source of income and the skills and attitudes to take advantage of the changes as they occur.
Frightening as it may appear to many, the human race has an amazing capacity for survival and adaptation. We have survived plagues, floods, droughts, ice ages and all the horrific things we do to each other in the name of religion, national pride and other causes. We have survived, the disruptive innovations already mentioned. We have even survived (at least most of us have) bad TV, Facebook, email and viral You Tube videos.
There is no doubt that the human race will survive these new challenges, there will be more casualties. It is up to each one of us to choose whether to see the changes as life threatening disasters or springboards to a better future.
I have written before about the Pendulum theory, that society swings between a “We” and a “Me” peak every 40 years. The current “We” swing will reach its apogee in 2023. The last 10 years of an upswing tend to be the most dramatic. Those of you young enough to hold out for 20 years should see some big improvements in individual rights, celebration of success and a reduction in hostility toward “The Rich”. Read more in the Pendulum book. (affiliate link)
What are you doing to ensure your future in the new world order? Will you be crushed by adversity or take advantage of the opportunities to lead an extraordinary life?
Wishing you success.