in ruins. This gave the US, which remained intact, the opportunity to surpass the rest of the world in manufacturing, industry and export. The US enjoyed a natural trade advantage which allowed for the easy repayment of the war generated deficit. In addition, the veteran’s educational and housing benefit given to returning veterans resulted in increased productivity and a construction boom.
The devastation of much of the developed world coupled with innovations in the industrial age, such as electricity in many US homes, assembly line manufacturing, investment in the national highway system, etc. sparked the growth of behemoth corporations that monopolized markets both domestically and abroad. Their size meant they could benefit from economies of scale and provided high entry barriers to would be competitors.
The Industrial Age was emphasized by the role of technology. Many jobs became automated. Machines replaced some workers while other workers became more specialized. Labor specialization, control of raw materials and facilitating technology were the critical elements to economic success. Money was made slowly and methodically.
As market demands change, technology improves and the means of production becomes more efficient we transition into new ages marked by significant changes in the economy. The 1990s was an era of dramatic and rapid improvement in information and communication technology, accompanied by more efficient means of production which led to price falls which made the technology accessible to a larger segment of the population. The rapid spread of the Internet gave this massive market unprecedented access to vast quantities of information, as well as enabling communication and the formation of alliances unhindered by physical distance; or national or political borders.
Yes, we are in a recession, but a recession is merely one phase of a never ending cycle. This phase will play out and another, very different phase will follow. Since the end of World War II, we have gone to the Atomic/Space Age, then to the Information Age and now we are transitioning into the Age of Innovation.
“The innovation age is defined by user-defined advancements, effortless collaboration and rapid (almost constant) change. The maturing Information Age has resulted in a climate where information has become a commodity and available to everyone for little to no cost. The coming Innovation Age, in contrast, will determine how people utilize all of the information available to them in order to produce new products, services, experiences, etc. This is the point of separation between those organizations that thrive in the new “Age” and those who are left behind. Positioning your organization to adopt and leverage these attributes gets you in the game.” (Paul Williams)
The innovation age has also brought us a true borderless economy in which the globalization of markets has caused both international competition and international opportunities. The rapid advancements in technology that mark this age, make business and investing more efficient, and less costly, thus significantly decreasing the time it takes to make a profit. The flip side of that coin is that businesses and investments will be made obsolete faster as well. There will be few indicators to forewarn that a business or investment is about to lose money. The loss will come suddenly and dramatically. Promises of changes in infrastructure, and a move towards green technology offer hope for a very profitable future for those who position themselves to take advantage of the inevitable changes. The only uncertainty in the new age is how government will respond to the economic changes in regards to regulation and deregulation in order to facilitate entry into new opportunities.
Important Changes to Pay Attention To:
Societal attitudes towards working, saving, spending and borrowing will shift.
The structure of industries will change. Weak or less adaptive companies and industries will go under.
The world economy will become less US-centric as China is poised to resume as the world’s dominant economic superpower by 2025.
Creditors and Investors will be gun shy for a long time.
There will be less competition in most areas.
Resistance is Futile
In the Star Trek TV series “The Next Generation” and “Voyager” their existed a pseudo-race of cybernetic organisms called the Borg. The Borg was portrayed as an invasion threat for the crew of the starship and the entire United Federation of Planets. The Borg existed and operated for the fulfillment of a single purpose which was to “add the biological and technological distinctiveness of other species to their own” in pursuit of perfection. This was to be achieved through forced assimilation, a process which would transform individuals and technology into Borg. Symbolically, we can look at the Borg like the global economic shift we are facing and the inevitable changes that it will bring. Despite the constant resistance by every species they encountered, The Borg responded simply, “resistance is futile.”
Although the above example is fictional, it holds a significant truth in the message. I want to share another example from a personal experience just to drive the point home. In 1989, I was a young teacher in New York City full of fire, idealism and stubbornness. I initially clashed constantly with, but later came to admire and respect my first principal, Miriam Klein. Ms. Klein was very intimidating. She stood an imposing six feet tall and commanded respect by her authoritative mannerisms. Like most people, I had no idea how the business of education was run. Ms. Klein ran that organization as fine as any CEO runs a Fortune 500 company. Every few years as city and state government would change, there would be a total makeover of the school system and a forced change in the way day to day operations and the educational process was to be handled.
Ms. Klein, just like the rest of us, did not like scrapping everything we were comfortable doing (especially when it worked) for something new, untested and drastically different than what we had experienced prior, but she knew that the changes could not be ignored. Despite what seemed like insurmountable challenges, year after year she masterfully led our school to national and even global prominence no matter what changes we had to make.
Having taken an interest in me, Ms. Klein groomed me for more than a decade on leadership, problem solving and organization skills. One of the finest lessons she taught me was how to handle introducing the drastic changes that were out of our control to the staff that were sure to protest. I learned from her that resistance, resentment, followed by acceptance is the process that humans go through when faced with unwanted change. Understanding the process, she simply introduced and trained everyone on the new system, and ensured that everyone would adhere to the changes through incentive or threat of sanctions (whatever it took). She knew people would grumble and even attempt to sabotage the changes initially, but eventually they would adjust the same way they always did.
We have entered into a new economic era in America. You can resist it about as much as you can single handedly stop a freight train. Resentment will only slow you down from taking the proper steps to improve your situation. As a matter of fact, if you do not embrace the change, you will surely sabotage your own success. It’s critically important for you to accept the reality that the world has changed and that the change is not a temporary shift. Most of the changes we are experiencing will be here for decades, and even when they fade we will not go back to yesterday. We will be introduced to something new and drastically different than we have ever seen before.
Taking a page out of Ms. Klein’s book, my advice to you is simple, the changes we are facing are here to stay, get over it, accept it, and let’s move forward. Most of the manufacturing jobs and other industrial age industry jobs are gone forever, the time of easy credit and borrowing are gone, and the ability to stay on a single job for 25 years, retire and collect a pension no longer exists. You can’t turn back the hands of time so the faster you accept the new normal, the quicker you can put yourself in a position to stop the financial bloodletting and start laying the foundation for wealth.
Reinventing Yourself for the New Job Market
“I think the unemployment rate will be permanently higher, or at least higher for the foreseeable future. The