OLD vs NEW ECONOMY

If you were recommending your child to choose a future would you suggest manufacturing or technology? It seems obvious right? We’ve been experiencing a steady change in our economy since the introduction of computers and automation to our workforce over 30 years ago. But more recently, technology has accelerated these changes and made the effects much more pronounced. We now have two economies. The old one, which is primarily based on: trades, production and domestic services which have changed little over the years. And the new economy, based on finance, technology and innovation which all thrive on change. In a sense, the old economy new services the new economy. And inside each, is a social class of people whose lives are more recently defined by which one they come from.

And with such rapid change, the divide between the two economies becomes increasingly apparent. Many try to classify these divisions by: politics, geography, education and income but really the division is in opportunity. Those with and those without. Those in the old economy have basically been blindsided by technology and this is not their fault – they were just doing the hard work that our country was founded on and the rules changed underneath them.

One of the problems is that as the new economy grows it’s often at the expense of the old economy. Technologies are inherently implemented to replace “the old way” of doing things and usually result in the loss of jobs despite an increase of productivity. There is no way to stop this trend. And as technology connects the world it increases specialization around the globe. It’s easy to think that other countries are taking our jobs but every economist will tell you that these job losses are a natural shift caused by automation and technology. Closing borders and trade partners are just a way of finding scapegoats to not having a better solution.

So what can we do? It’s complicated by the fact that we are living in a closed bubble and it becomes a zero sum game. If we just focus on growing the new economy it will continue to cannibalize the old economy. And the only way to grow the old economy is to improve the new economy.This dynamic is unfixable until we realize we need to expand outside our bubble for new opportunities.

The founding premise of the 2020plan is that we must expand outside our borders to engage in new commerce opportunities around the globe. And by exporting our specialized natural resources to populations 23 times the size of our own – this will fundamentally lift both economies to growth not seen in decades. In addition, the old economy will develop a hybrid that joins the new economy in providing the physical products and services needed to implement the technologies that will be developed. What other way will we ever bring back jobs to the old economy?

It is only when we open our eyes and borders then that we can get the growth in: jobs, wages and opportunities that we need. It’s time to stop trying to manipulate growth from inside our bubble and embrace the immense opportunities waiting outside our borders. Both economies are waiting.