If’ there’s a single most frightening feature of digital technology, it’s the way it destroys jobs. If you look at industries where the internet and computers have had the most punch, industries like publishing and journalism, you see dramatic employment shifts. The big fear is that digital networks create high efficiency which means fewer and fewer people are required to operate a viable business concern. So far the Digital Age has followed close to form in creating a few fabulously successful business owners and many displaced or unemployed workers. But is this just a painful feature of the opening decades of this new technology-based era? Is there a paradigm shift?
Certainly most of our understanding of society and our expectations about how events unfold are shaped by industrial society and the social arrangements that emerged from a manufacturing-based economy. After all, during the same time the newspaper business and publishing took big hits, computer scientists, programers and digital designers all expanded their presence in the economy. Maybe part of the confusion during this transition to a digital-based economy is largely a matter of vision. We haven’t been looking closely enough at how events are actually unfolding and our industrially-shaped sensibilities hold us back from seeing what is emerging.
Three key points of economic concern, whether in an industrial economy or a digital economy, are education, investment and employment. By just looking at employment alone we might miss features that are truly changing society and maybe offering a chance for improvements. I don’t want to be overly optimistic, but I do want to keep an open mind about how digital technology is changing the society that I grew up understanding as industrially driven. Let’s take a look at how digital education, alternative investment and digital employment might fit together.
Less Than Impressive
The economic upswing of the mid-1990s and the subsequent bubble economy are a disappointment if you compare them to the relatively smooth expansion of the post-WWII economy. From 1945 until 1970 the industrially-driven economy was impressive, expansionary, and generally inclusive -people found jobs. Education was hierarchical. You had to learn the material in grade school in order to ascend to middle school and you had to master the material of middle school in order to ascend to high school. College was then open to those who did well enough during the previous sequence of promotions.
Investment in the post-WWII economy was all about the growth of corporations. Stock shares were, and still are, valuated against a company’s perceived success in the marketplace. When the company grows the stock goes up. But the entire financial structure of careers became tied to the stock market as pension funds turned to Wall Street for growth opportunity. It was a house of cards that worked during the growth years and flagged during the harder years after 1970. Way too much was expected of corporations.
Employment became a meritocracy system after WWII especially for professional jobs that required college degrees. It worked for about 25 % of the US population and left other types of jobs for those who weren’t on the college track. Government employment and entrepreneurial skills carried other smaller parts of the work force forward but hourly wage jobs were left for everyone else. Corporations of all sizes moved to the center of the US economy, as small family farming faded. After 1970 the combination of meritocracy in eduction, stock market centered investing and corporate centered employment became increasingly inequitable. There were still big winners who gained financial wealth, but the percentage of comfortable middle class families came under pressure. The system was over-burdened and unable to provide enough growth to broadly distribute opportunity throughout the US populous.
Around 1995 the Digital economy began to gain traction. It didn’t immediately displace the previous industrial economy, but it began to find inroads into that economy and produce changes, some subtle and some more dramatic depending upon the industry. The US economy was driven upward by a combination of industrial growth and digital expansion. After 1995, education, investment and employment have all begun to change under the onslaught of new digital technology. A new social structure is morphing from the previous industrial society as digital methods and networks expand.
Education began to change when information became readily available on the internet. At first the intenet was an added tool in the classroom, but by 2011 that changed. That’s the year MOOCs (massive open online courses) appeared. Now there are several good platforms offering some of the highest quality university education available anywhere, and the material is often open to anyone who has access to a computer. This is a potential game changer. People all over the world now have access to the best educational experiences. The average person now has the potential to gain skills that he or she had no access to before online education took shape.
As the traditional investment and financial community have struggled to offer growth based on corporations and often failed, smart investors have moved away from Wall Street. The alternative investment space is now a small but established option for individuals who seek better returns for their money. One of the ways this is happening is with the use of Self Directed Independent Retirement Accounts. With a SDIRA the investor takes responsibility for investment choices into his own hands. There are a few restrictions on the kinds of investments he or she may make, but very few. So if a person with a SDIRA finds a small business – possibly a digital business – that has great potential and is beginning to expand, that is a viable place to invest SDIRA money. In other words alternative investment tools are a source of funding for start up digital companies along with angel and venture capital.
Finally, employment is also changing with the expansion of digital tools. Hackathons were originally software developer based events when they first appeared in 1999, but now that is beginning to change. When a hackathon is set by a prominent business many people interested in the general area are likely to participate not just software programers. The hackathon organizers may have a particular target goal they hope to accomplish, but other participants also have goals. Participants are as likely to successfully network at the event and gain contacts that help with their career development. That networking is outside the official goals of the organizers, but just as likely to lead to new businesses, new jobs and new work related contacts. Digital employment methods are looser and more community and networking based than industrial employment was in decades past.
The combination of new education opportunities, new investment sources and new employment methods are the hope of the digital era. As digital technology penetrates deeper into every industry its possible these new methods will begin to produce more and more opportunities for careers and employment. The methods are new and not yet settled into any final patterns, but these three areas are interacting and beginning to yield significant results.