Friday, January 10, 2014

The Next Big Thing

I have a challenge for the entrepreneurs and inventors of today: Make the "next big thing" something that a lot of people will have to make.  All of the talk this week about the 50th anniversary of President Lyndon Johnson launching the "War on Poverty" led to the usual accusations that the rich "don't pay enough in taxes" to support the poor.  I would rather see the rich invest in people again.

Following the industrial revolution, every technological advance helped to expand the American workforce.  Mechanized plants, the continental railroad system, the telegraph and telephone system, and the growth of the auto industry all added huge numbers of jobs to the economy--and helped raise the standard of living for nearly all Americans in the process.  But since the dawn of the "Microprocessor Age", every new advance in technology has served to reduce the number of Americans required to produce it.

At the height of its powers, General Motors directly employed more than 600,000 workers.  Compare that to Apple--which is now a bigger company than GM--which directly employs 47,000.  (Apple likes to claim they "create" more than a half-million jobs--but they count UPS drivers, workers at suppliers who make components shared across the phone industry and everyone who ever created an app as "employees"). 

GM plants--and it's headquarters--were located in the gritty heart of cities across the Midwest and the East Coast--and their dealerships could be found on Main Streets in even the smallest towns--employing salesmen, receptionists, mechanics and parts room workers.  Apple is located in the upscale suburb of Cupertino, California--and Apple Stores are found in larger urban areas, usually in mega-malls or upscale shopping area.  Most of it's sales are done on-line--which requires little infrastructure (and fewer employees) to operate.  And of course, the vast majority of its manufacturing is done in China and elsewhere in Asia.

When GM employees went to work back in the day, guys with advanced engineering degrees parked next to high school dropouts.  And while they may have gone to very different positions in the plant, both jobs paid enough to live the comfortable middle-class lifestyle of the 50's, 60's and 70's.  At Apple, the electric cars in the parking lot belong to a bunch of people with multiple degrees--and that probably goes for the janitors and the lunchroom folks as well.  Not a lot of work for eighth-grade educated folks in designing IOS software.

So if we really want the rich to help us win the "War on Poverty" let's get them to make the "next big thing" a technology or manfactured product that will require large numbers of people to go to work to make--rather than something that will make it easier for large numbers of people to just sit around.

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