The editors at Big Think posted an article titled “Is the Internet Destroying the Middle Class?” that introduced an upcoming presentation by author Jaron Lanier at Techweek Chicago on June 29, 2013. Mr. Lanier’s premise is that technology companies are taking over the North American economy, yet employ fewer people than the technology companies of old. And this is a problem that needs a solution.
The article explains that businesses such as Apple, Amazon, Facebook and Google, whose market cap was around $1 trillion, only employed a total of 190,000 people. Now contrast that to the now-bankrupt Kodak which, at its peak, employed 140,000 people and was worth $28 billion.
What does this mean for the middle class in North America? “It used to be that manufacturing was a path to the middle class for those who didn’t have as much education,” says Harvard Business School professor Willy Shih. “I think those days are gone.” Is North America’s middle class doomed? Can the new economy support the employment needs of the growing population here?
The Thinking Class
Must businesses recognize a “thinking class” instead of a “working class?” As we move away from a manufacturing-based economy, what will sustain the working population? In 1959 Peter Drucker coined the phrase “knowledge worker” to describe the type of work that would replace manual labor once machines replaced physical labor and workers. Richard Florida, an urban theorist and graduate school professor, echoed this sentiment when he declared that “our institutions, the mass production institutions, the Fordist institutions, have been broken for quite some time but few acknowledge it.”
The fact that the world has shrunk and become more interconnected has been both a blessing and a curse. Technology has made more information and people accessible regardless of where it or they reside around the globe. That has spurred on the invention of even more technology firms and services, bringing us back to square one: Today’s top businesses employ fewer people.
Kodak’s instant camera has been replaced by Instagram, which has reduced the need for both manufacturing and retail services such as photography processing. Sony’s Handicam video cameras are routinely replaced by Apple or Samsung smart phones and shared via YouTube. It’s an evolution (or revolution) but has the work force evolved with it?
Eventually, the education system will catch up and prepare more children to work for these new types of businesses or better yet, create new ones. A bigger “thinking class” is required but what can businesses do in the meantime? There’s an existing workforce that’s growing more obsolete with each new technology firm that opens its doors.
Sensei Debates: Today’s #bizforum debate on Twitter will focus on this very issue. Is the Internet killing the middle class in North America? What will it look like in 25 years? Is it a business’s responsibility to retrain employees or is the solution to build manufacturing economies in up-and-coming Third World countries to manufacture our goods and fuel a middle class who will then purchase our services and technologies?
Join the live debate tonight by following the #bizforum hashtag on Twitter from 8 PM to 9 PM Eastern time.
Image Credit: Cliff, via Creative Commons
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