The transition time part 2
Today many countries are experiencing significant economic changes. According to many economists, the current change is actually the transition from one phase to another. To developed countries, it is the transition from industrial into knowledge economy. To developing countries, it is the transition from agricultural to industrial economy. Before the world can move into a period of stabilization, there will be more changes, more economic impacts, more political unstable, more unemployment in some areas, and more jobs growth in another areas.
If we look back to U.S. history, the great depression in 1929 was really a transition from agricultural to industrial. During this time, small family farms are changing and become large industrial farming. Larger farms are better to take advantage of machinery equipments rather than manual labor. The shift in the nature of farming resulted in cheaper, more reliable food supply, higher profits for farm owners but it also meant fewer jobs in agriculture. While this occurred, the growing manufacturing industry demanded more labor workers. Many farmers abandoned farming works, moved to cities to work in factories. During the transition agricultural to industrial, there was resistance as some people wanted to stay in farming works and refused to change. The severe depression of 1929 exposed the vulnerability of small family farms because they could not compete with larger, more efficient industrial farms. Most small farms went bankrupt and millions of people lost jobs in the 1930s and the U.S experienced the most devastating economy recession in its history. When land owners and farmers lost jobs, people who moved to industrial jobs did better, some do so well such as Carnegie (Steel millionaire), Rockefeller (Oil millionaire), Morgan (Bank millionaire) etc.
Some economists believe the current economic situation is similar to what happened in 1929. It means manufacturing jobs are becoming difficult to find because they are being outsourced to lower cost countries. The prospect of fewer jobs makes a lot of people panic. Manufacturing is the backbone of developed countries' economy because it has provided well-paid, stable jobs and keep the economies of the U.S, UK, France, Germany, Italy, Japan and S. Korea etc. booming. People have asked: “Can the knowledge industry provide enough jobs to replace manufacturing jobs?”. This is where politicians step in to take advantage of the worry and declare that a lack of manufacturing would leave developed countries vulnerable and weaker. Many advocate that an economy based on technology, health, and services does not seem as promising as manufacturing. However, if you look back into history, the same thing also happened in 1930s where politicians told people that with the vast amount of agriculture lands, everybody could have jobs in farming but there were fewer jobs in manufacturing. The fact was some people believed in that, stayed on their farms then lost their jobs. The same thing is happening today as there are people who believe that when economy improves, there will be manufacturing jobs available so they waited. Few people look at the fact that today there is a shortage of technology workers all over the world. When manufacturing industry is declining, the knowledge industry is growing. For example, the largest industry company such as General Motor lost billion dollars each year at the same time when Apple computer is making billion dollars each quarter and become the largest technology company on earth. When people who work in factories are losing jobs, people who work in technology jobs are doing well. Some succeed extremely well such as Steve Jobs, Bill Gates, Marc Zuckerberg, Sergey Brin, and Larry Page etc. (All of them are in Information Technology).
Economists have identified several types of people during the transition. The innovators are people who are visionaries, they set the direction and benefit the most. After the direction is set, there are some people who immediately follow it, they are the early adopters who also benefit from the transition as the supply is much less than demand. Eventually, when the direction is well understood and the technology business established firmly, a large numbers of people try to meet the demand, they are the late adopters or followers. Of course, as long as demand exceeds supply, jobs will be plentiful until it reach a balance. However, there is a small group who do not accept the change, these people are called the resistants or procrastinators. They are people who will suffer the most and may not survive at all. As the transition is taking place, some economists consider Bill Gates, Steve Jobs, Mark Zuckerberg, etc. as the innovators who set the technology direction. Current technology workers, software developers, testers are the early adopters. Eventually as the technology industry is well establish, more jobs will open, more people will change their careers into technology area (Late adopters, Followers).
From the economic view, manufacturing jobs are labor intensive so it makes sense that these jobs should go where labor costs are lowest or being replaced by automated process with robots. It is better because it means people would pay less for manufactured products. Having lower priced products made people with lesser income can afford to buy them. When more people consuming things, more people buy things then it will make the economy thriving as the law of supply and demand dictates.
From the economic view, technology jobs are knowledge intensive so it make sense that these jobs should go where there are skilled workers and to countries that have the best education system. With globalization, it means no country could monopolize this area as jobs will find skilled workers, regardless of where they are. In the past, people migrated to where the jobs were but today with the advance of technology such as the internet, jobs will have to go where skilled workers located and to countries with the most advanced education system.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
