Wednesday, December 14, 2011

The dark side of innovation - 2.

Economist Joseph Stiglitz sees fundamental parallels between today's state of the economy and the Great Depression
(January, 2012. Vanity Fair) - Back then we were moving from agriculture to manufacturing. Today we are moving from manufacturing to a service economy. The decline in manufacturing jobs has been dramatic—from about a third of the workforce 60 years ago to less than a tenth of it today.

There are two reasons for the decline. One is greater productivity—the same dynamic that revolutionized agriculture and forced a majority of American farmers to look for work elsewhere. The other is globalization, which has sent millions of jobs overseas, to low-wage countries or those that have been investing more in infrastructure or technology.

His solution is massive public investment in education, technology, and infrastructure. I wish we had the money and the institutions to handle the task. As I wrote earlier, innovation by itself will not solve the problem.

tags: economics, trends, education, system, model, battle

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