8. Economic Sciences and Technologies Overview
Main concept: Economic sciences and technologies, aided by accelerating IT and nano science and tech, will increasingly be organized to aid technical productivity, entrepreneurship, wealth creation, and creative destruction in leading industries and societies. Political reforms will increasingly be needed to counter the disruptive effects of accelerating densification, dematerialization, innovation and automation on human workforces, and accelerating inequalities due to rapid wealth creation.
Leader’s challenge: Incentivizing Innovation while Moderating Economic Inequality (avoiding oligopoly, corruption, and corporate welfare).
“Accelerating Technical Productivity (TP), not GDP, creates tech unemployment and drives wealth creation in modern economies.”
West vs. the Rest. The US produces roughly ~25% of gross world product. It was 40% in 1960, and is around 25% now, trending slowly down. Our absolute GDP continues to grow exponentially, but at a much slower rate than developing nations, as we are already so rich. The US has serious problems (governance, finances, education, workforce), but they are problems of middle class stagnation (stitching sideways, relative to past growth and rise of the Rest), not of overall capacity decline. We continue to be where innovation and investment first go. Our relative share of capital markets will decline, but the absolute wealth, culture, and innovation of the West (US 1st, Europe 2nd) remains the aspiration of the world, and global tech productivity will hit astounding new levels in coming decades.
Moderate Economic Inequality/Incentives. When there’s too little income and asset inequality, there is no innovation incentive (Socialism, Communism). When there’s too much, top players capture markets and governments, rewrite the rules (“Crony Capitalism”), middle class electorate becomes undereducated and unproductive, votes its government into insolvency (“Idiocracy”). We need fair tax law, biz law, antitrust, policy, institutional pluralism to avoid this (Acemoglu).
Productivity, Collaboration and Employment. In 1995-2002, US lost 2M mfg jobs, mostly to China. In the same period China lost 15M jobs, mostly to machines. Technical productivity (TP) underlies modern GDP growth. In turn, our STEM/technical abilities and infrastructure underlie all TP. Online education, physical and virtual immigration will keep STEM and TP strong. Github. oDesk. Wikinomics. DIY and open source culture. Tech-caused unemployment will continue to disrupt. Education must adjust to this, support a perennial startup culture. Expect smart global HR platforms, 2020 and beyond.
Finance, Entrepreneurship and Innovation. Financial innovation always leads TP, AI and value creation. Trillions of dollars daily in foreign exchange, but regulation remains lax, as we saw in the Global Financial Crisis. Small business support also lags, and is critical to technical productivity. Accelerators, Seed Funders, Crowdfunding (Kickstarter, J.O.B.S. bill) are among the best new financial innovations. These are analogous to Credit and Mortgages of 1940’s-60’s, VC’s of 1980’s-90’s. Entre- and intrapreneurship need not just funding but freedom, problem awareness, incentives, passion, purpose.
Development, Economic Freedom, Tech Disruption. Development brings both freedom and security, after a predictable period of initial new instability (see J-Curve, Bremmer). Core vs. Gap development choice. 18% of world lives in extreme poverty ($1.25/day) today. At current development rates this will be <5% by 2035. TP is job disruptor and wealth creator.
Books: Revolutionary Wealth, Toffler, 2007, Immigrant, Inc., Herman, 2009; The Great Divergence, Noah, 2012.
- What are your economic technologies research, acquisition, R&D, hiring, training, measuring, & mgmt strategies?
- What key disruptions or threats must you anticipate from accelerating wealth, deregulation, and globalization?
- What problems and opportunities could be engaged if you had more money, and better financial planning, budgeting, and cost accounting systems?
- How can you get measurably more of the most valuable economic capabilities, at an efficient ROI?