I have suddenly seen a number of articles written about how our economy is fundamentally changing. Starting in the early 1900s, the U.S. led the industrial revolution, the making of things. For about 80 years, the industrial revolution was at the center of our economy.
In the 1980s, the advent of computers and the Internet, the rise of cheap labor overseas, and the ease of which it became possible to move goods all over the world changed this dynamic. The U.S. economy was no longer built on the backs of people who create goods, but instead on the idea that knowledge is power and he who controls the knowledge centers becomes economic powerhouses.
Now, we are in another transitional stage. The rise of social networking, the rise of web-based communication, the rise of user-defined content (wikis) and the use of the web as a shared platform to distribute information is changing the nature once again. The next phase, believed by many (see Business Week and October 15 article in Fortune for examples), is the rise of the Creativity Economy.
The idea is that he who controls the creative centers, she who invents and comes up with the concepts that companies are built upon, will be the world’s economic powerhouses. If this is true, it indicates that the U.S. can continue to be an economic powerhouse. We have continued to lead the world in innovation, even if we make it somewhere else.
I’m not certain that this is really new but instead can be seen as a refinement of economists’ beliefs. After all, the industrial companies (examples: GE, 3M and GM once upon a time) were built on ideas and so were the knowledge powerhouses (examples: Microsoft, Verizon, Comcast, Bank of America).
But it does highlight why, given all the measurements we use for successful economic activity, the U.S. can still be at the forefront. To me, it is a refinement of the definition of what makes the U.S. economy so powerful. It also, in my mind, re-emphasizes the role that education plays in our country and how, in this day and age, it is even more important that we figure out how to educate our children effectively.
What does this mean for you and me? It means, to me, that those of us who control information and make our living dispensing that knowledge are in serious trouble. Much if not all of those business models will be swallowed whole by web-based resources, assessable from your desk or laptop or cell phone anywhere in the world.
It means to me that we have to get busy creating and innovating, finding new avenues to create value for our customers. At the end of the day, those of us successful at doing this will be the economic powerhouses of our time.