The Quest for a Society – V (America Again – The Economy)

The Quest for a Society – V (America Again – The Economy)

This blog might be just a restatement of previous studies done (i.e. The World is Flat). It is purely for my own understanding.

America can be defined and modelled into two regions (the talented and the common man). The talented of America mostly reside in California and New York while the rest forming the common man. The talented are very focussed and responsible for the advancement (sometimes the other way around) of Society, Technology and Civilization. The common man just follows the trends set by the talented one’s. There is technology upheaval every 25 years in America, which causes businesses to change themselves, many going bust and many hitting the jackpot. In this process, the business to remain competitive look to source resources (including manual labour) where it is available the best and the cheapest.

There is a huge supply of labour and other natural resources available in the world waiting to be absorbed (mostly in India, China, Africa). As there is unsatisfied cheap supply, the American business requirements would keep getting absorbed by these countries. This would make it imperative for the common man at least in the next 2 centuries to rapidly move up the value chain or lose out to the East.

So we can ask the question now, Did America’s middle class lose out to the East due to (work at lower cost)? The answer is resounding yes and there is no other way out either.How many jobs went to the East? My estimate is 100-200 million to China, India and also all new low-end jobs will keep getting created in the East. The current dip in the economy and loss of jobs in America can be seen as a technology change if one looks at a larger perspective. Technology focus changing from Information Technology to Biotechnology, Environment and Clean Energy.

There are some learnings to be taken one can take from America (as America is the foremost Civilization of the World and will continue to be so for the next 2 centuries). All the talented areas will never run out of business, jobs, money as they can see technology change much before then anyone else. It can also cause a lot of pain to the common man in terms of loss of one’s livelihood and hence the loss of all other benefits including sometimes the loss of one’s life (Although it is rare due to the Social Security System in America).

The current America going bust (2000-10) is a case of a developed nation undergoing a technology change and its middle class (common man) adapting to change. Other countries would face a similar cycle of boom & bust due to technology change. Hence they must also move up the value chain continuously. Even more so as there is no system of Social Security in the East and off course they are hardly creating any technology themselves.

If you look at a micro-situation and one gets down to an individual level, how does a common man in the mid-30′s in a conventional industry change his technology skills, livelihood? My personal experience is that initially it is tough (with an initial barrier to accept change). After that it becomes mainstream and one can roll. The initial period can make or break one’s chances. Due to initial failures, one retreats and might fall back on his earlier skill (which again is a no way out).

Caution: This might be all theory

Tags: America, Society