Since the onset of the current economic recession, much of our collective attention has been focused on restoring the US economy to where it was before the crisis. However, in an article in Vanity Fair, Nobel Prize-winning economist, Joseph Stiglitz argues that this focus will do little towards ensuring a real recovery because our problems were, and continue to be, much bigger than we thought. Our original diagnosis and prescription for the ailing economy were wrong because they failed to take into account that the dramatic implosion of 2008 was a symptom of a chronic illness rather than a bout of a short-term disease.
It has long been widely recognized that revolutionary forces such as globalization and the internet, among other technological advancements, are fundamentally transforming the global economy. What we have failed to fully acknowledge or address, however, is just how these forces have changed; and will continue to change; the nature of jobs and work in America. In reality, the healthy pre-2008 economy was an illusion cloaked in unsustainable consumption and debt. The financial crisis, and resulting sharp increase in unemployment, served both to exacerbate troubling preexisting forces and to rip off the blindfold that had prevented us from seeing them clearly. The demand for many of the jobs that were wiped out during the crash will never return as they were already on the verge of being obsolete. Machines are increasingly taking on jobs that previously employed human workers; and millions more jobs have been shipped overseas where the labor is cheap and the regulations lax. Yet, there is another side to this story: There are indeed jobs that have disappeared forever; but there are also millions of new ones that cannot be filled, despite 8 percent unemployment. These jobs are the ones that signal to us that we have transitioned into a new economy. While some call it ‘creative’, others call it ‘knowledge-based’, and yet others emphasize focus on ‘services’; what is clear is that we as a nation are unprepared for it. In this economy, workers must be able to engage in complex problem-solving; to interact fluently with, and adapt to fast-changing technologies; and to navigate a highly networked world. In addition, there is an increased need for greater knowledge of science, technology, and math. Although this shift has been underway for decades, instead of facing it head on, we have been resistant to change; enacting policies and practices to slow the tide, rather than to ride the waves, of the future.
Compounding the Great Stagnation in which we currently find ourselves is the fact that the systems that should support our shared national prosperity are broken, leading to greater economic disparities. As we are realizing that even those with a college education (or beyond) might not have the right skills to compete in the new global economy, there is real concern that those who were hardest hit by the recession (low and middle-skilled workers) will be starting from too far behind to catch up. And, with increasing evidence that high levels of inequality have negative effects on growth and other macroeconomic outcomes, this could spell even more trouble ahead.
Untangling the complex and interconnected problems that have contributed to our huge economic challenges—failures in leadership, education, infrastructure, and vision in the face of change—will require us to develop new models of collaborative leadership and multi-sector, scaled, solutions that allow for greater equality of opportunity for all Americans. As we do this work, we would do well to look to 4 movements bubbling up at the edges of the economy that might foretell the future. These trends help us to answer these pressing questions: What will the jobs of the next generation look like? And, what specific skills will our citizens need in order to be prepared for them?
1. Manufacturing Reborn. Manufacturing is not dead in America; it is taking on new forms. While it is true that a large part of high-volume, low-skill jobs are executed by factories in the developing world; many low-volume, high-tech jobs are still carried out by US-based companies. Indeed, where we once thought of manufacturing jobs as low-skill workers on an assembly line, we must now understand that today’s manufacturing jobs often require STEM education, and strong communication and cognitive abilities as they are in areas like product design, engineering, and marketing. In addition, digital manufacturing technologies, including 3D printers, have made it possible to make and deliver products one unit at a time as needed. This has spurred a ‘ Maker Revolution’ whereby, much like the web entrepreneurs of the 90’s, forward thinking individuals are engaging in DIY innovation: building new products in their basements and garages. While this movement is still in early stages, we are already seeing a culture of collaboration that hints at a future of open-sourced, democratized, production that could give birth to not just new companies, but to whole new industries as well.
2. Organizational Innovation. We all know the companies that are on every ‘most innovative’ list: Apple, Google, and Amazon. But, globalization and web platforms that put millions of options at consumers’ fingertips with the click of a mouse require all companies and organizations to work in ways that foster continuous innovation. This means building new organizational structures, processes, and models that leverage technology and human capital (both inside and outside the organization) towards creating the best possible products, services, and experiences. The hierarchical structures of old will not support the creativity and openness required to be successful in the new economy. More and more, we are seeing new companies turn their back on old ways of operating; instead choosing to chart their own course. They are building on existing technologies for heightened productivity, sharing more information than ever before, and crowdsourcing new ideas. The jobs that exist in these ‘new economy’ companies call for entrepreneurial, creative, tech savvy people. As this shift solidifies, we must seriously rethink how we structure education in order to meet these needs.
3. Big Data and the Data Economy. Powered by the internet’s ability to rapidly collect data; and by technologies that can manage, filter, analyze and deliver it more seamlessly than previously imaginable; we have entered the era of Big Data. Tweets, Facebook, YouTube videos, mobile devices, even sensors on buildings, are producing tons of data daily. Trends in public sector transparency and the civic tech movement are adding a wealth of government data to the mix. From Google Maps to apps that allow residents to report potholes to government agencies using their mobile phones, Big Data is giving our world a ‘ nervous system’ ; allowing it to visualize, analyze, and respond in real-time. And, the possibilities are endless as people can use and build upon the data of others, steadily expanding the adjacent possible. Civic and tech entrepreneurs are harnessing the moment; and new services and companies are being created at a rapid pace. In fact, Alex Howard of O’Reilly Media has said that “we’re on the verge of the next generation of services driven by open data, which will involve everything from energy to health care to consumer finance to transit sectors.” From all this, it is clear that the workers of tomorrow will have to understand the value of the information that exists; and be able to analyze and use it effectively to understand their customers better and adapt to market realities. No longer will decisions get made based on conventional wisdom or assumptions.
4. The Micro Revolution. With advances in technology and communication, the old economic theory that small is beautiful is resurging. In fact, the Maker Revolution that is putting manufacturing into the hands of anyone with an idea is part of what some are calling the ‘Micro Revolution.’ The plummeting cost and size of technologies has greatly democratized innovation. Plus, open data and the crowdsourcing culture have given people access to information that was previously far out of reach. In addition, crowdfunding platforms enable keen entrepreneurs to raise funds by engaging networks online. This trend has existed for a long time in the world of the web startup; but it is no longer confined to that space. Today, nearly 14 out every 100workers is self-employed. This can partially be attributed to the recession: Big companies are not hiring as they did in the past; and many have lost trust in big-business. However, many new economy entrepreneurs, empowered by technology and networks, are choosing to forego the corporate world because they are seeking adventure, flexibility, and autonomy. Platforms such as Etsy (handmade goods) and Airbnb (short-term apartment rentals) enable even the not-so-tech-savvy to get in on the action. And, the platforms themselves are part of this movement; having been developed by individuals or small firms. While it is unlikely that big brands will disappear, the internet means that they will be competing with these small, often hyper-creative brands. This could cause a shift in the way that they operate (accelerating organizational innovation). In addition, instead of investing heavily in R&D themselves, more big firms are buying smaller firms to do it for them. The ‘micro’ trend is already unleashing an enormous amount of innovation; and those who are equipped with the imagination and gumption to dive right in and take risks will come out on top. Given this, many argue that entrepreneurship is a skill that should be taught in every school.
We cannot continue to ignore the trends that will shape our next economy. In order to fill the positions of the future, we will need to re-imagine our education system, which is still largely situated in the past. And, we have to expand our view of education beyond K-12. We live during a time of rapid change, and we need to develop a culture of continuous learning such that people do not wake up, as they did in 2008, to find that their training and skills are suddenly useless. There is some promise in the fact that private sector companies like P&Gand IBM, knowing the challenges that they face in hiring a qualified workforce are getting involved—partnering with governments, educators, non-profits, and civic leaders to fix education cradle to career. This type of dynamic collaboration is exactly what is needed to ensure that our citizens are ready for work.