Tuesday, May 19, 2015

Making Less In America

Monday provided an excellent example of what life is going to be like in the "New, New, New Economy" here in the US.  In the morning, we spoke with one of the UW-Oshkosh graduates who won the America's Pitch Tank competition last week--a Shark Tank-style contest that saw business leaders select what they think could be the "next big thing" and to provide some cash for start-up costs, development or marketing.  The winning entry was a smartphone app that tells you what bars or parties in town are the best to go to on a Friday or Saturday night. 

A couple of hours later, we heard from Con-Agra Foods that they are shutting down one of their two Ripon cookie factories--leaving 320-people without jobs.  The two events showed the contrast between what used to be an economy where we Americans made things and sold them to each other--and the future economy where no one is going to be making anything.

The bar and party app sounds like a lot of fun and I'm sure that there is a segment of the population under the age of 30 that will find it incredibly handy--but is the developer of that app ever going to employ 320-people in a place like Ripon, Wisconsin?  And will that app be around for 70-years--employing generations of families?  Likely not.  It's a disposable, digital item that takes just a handful of people to create and operate--while computers take care of the rest.  In fact, none of the finalists for the Pitch Tank contest last week had any ideas that would lead to mass employment or product production.  "Too much overhead and start-up expense" the business "experts" would have told the would-be entrepreneurs.

Of course, businesses can only provide us with what we want.  When was the last time you bought a package of Rippin' Good Cookies?  I bet you probably grabbed the Keebler or Nabisco product right next to them because they were 15-cents cheaper, or the kids saw the commercial for them on Nickelodeon and that is what they want to eat.  Or maybe you don't buy cookies at all anymore.  You only eat "artisan" food--prepared by small bakeries using hand-ground flour and chocolate made by Swiss chocolatiers.  Or you are a socially-conscious shopper--buying food that is "certified organic", with "no genetically modified organisms", grown using "sustainable farming practices", with "fair trade chocolate" and "living wages for all workers" sold at your food co-op.  Or you are on one of the multiple fad diets featuring no carbs, no sugar or no gluten.  Or maybe you are taking Michelle Obama's advice and just eating food you can grow yourself.

Perhaps the folks at the Rippin Good Cookie factory can develop apps that "make cookies" that you have to put into certain orders to win gold coins on your smartphone--and that allows you to send requests for "more cookies" to your social media friends every day.  And the factory itself can be retooled to make "unlimited voice, text and data" or "rollover minutes" to sell to those glued to their smartphones and tablets 18-hours a day.  That seems to be the "business model of the future".

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