Competitiveness and Strengthening Our Future

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The US faces a widening divide between two distinct economic realities. On one hand, highly educated individuals thrive with rapid wage growth, abundant career opportunities, and enhanced quality of life. On the other, less-educated and underemployed workers grapple with deindustrialization, technological displacement, community decline, and social marginalization. To foster a more inclusive and equitable society, we must address the root causes of these challenges and implement future-oriented strategies.

Understanding the Divide

1. Deindustrialization and Economic Decline:

   • Manufacturing jobs, once the foundation of American middle-class prosperity, have significantly declined. Between 2001 and 2007, 3.4 million manufacturing jobs were lost, followed by another 2.3 million during the Great Recession. Globalized trade and foreign competition, particularly with China, decimated industries like textiles, apparel, and furniture, leaving non-metropolitan areas economically vulnerable.

2. Technological Disruption:

   • Technological innovation, while driving significant productivity gains, has disproportionately replaced low-skilled jobs in industries such as manufacturing, logistics, and clerical work. This has resulted in stagnant wages and widespread job displacement, exacerbating income inequality. Meanwhile, high-skilled workers benefit from increased demand and income growth, widening the economic gap.

The Dark Side of Automation, AI and Robotics

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By nature I'm an optimistic person.  By profession I am a futurist that studies historic patterns and future trends.  By education I am an economist and political scientist. All of these background influences come together when I am pondering the future, and lately I have been contemplating automation and job displacements.

I remember studying the concept of social contract in college.  It's a theory that describes an agreement among individuals in a society to create and abide by a set of rules, norms, and governance structures to ensure mutual benefit, security, and order.  The idea is we agree to give up some rights and independence in order to gain certain benefits that will help us have a greater quality of life, and hopefully an improved standard of living.  Think of being taxed, so we can have roads, bridges, public education, police and firefighters.

What happens though when the "mutual benefits" agreed to, fall out of balance, and the benefits are weighted in favor of one group over another?  The short answer is - bad things.  

The Expanding Boundary of Opportunity and Employment

W. Edward Deming taught that quality is achieved by measuring as much as possible and reducing variations.  Japan widely adopted Deming's philosophies in the 1950s and, largely as a result, became the 2nd biggest economy in the world.  This revolution in manufacturing, that introduced a system of quality improvement and innovation, led directly to jobs and economic expansion.

This same kind of revolution is now taking place around decision-making.  Algorithms are now able to expand and codify Deming's philosophies and to take them to the next level.  Algorithms can standardize decision-making and make improvements to them, and for the first time in history uncoupled them from the very human dynamic of unpredictability.  This is a rich area for innovation and job creation.

Markets are often like a balloon - when one end is squeezed the other expands. When the market catches up with a competitive advantage and the advantage ceases, competition is squeezed and moves elsewhere.  Employment acts similarly.  When one industry is contracting, another often expands.  

Digitizing the physical world to more efficiently measure, monitor and make decisions about it is one of those expansion areas where competitive advantages can be found. This area today is rich with new ideas, new businesses and job creation.

Once unknowns become knowns (through data capture, digitization and analysis), smart people will build new businesses and solutions to take advantage of them. Investments and jobs will then migrate to the new frontier, the outer-edge, in search of new competitive advantages.  When something new is made possible - jobs are always created.  As something new ages into something ubiquitous it will be automated, jobs will decrease and investment will move toward the outer-edge.

The good news is that the the outer-edge, this expanding boundary, represents areas of recognized job creation, innovation and emerging competitive advantages.  The rule of the "Expanding Boundary of Opportunity and Employment" says that those who willfully move to the outer-edge through lifelong learning, focus and purposeful career choices dramatically increase their career and earnings potential.  Job markets never stop moving.  What about you?

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Kevin Benedict

Partner | Futurist at TCS

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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I work with and have worked with many of the companies mentioned in my articles.