In an insightful opinion piece in the April 3rd NY Times, Tom Freidman elucidates a fundamental truth about the economy - jobs are not created - except government jobs that do not provide real economic growth.
That jobs are not created is an economic fact that has eluded the U.S. Government, most policy advisers and the American public for decades.
Jobs are the result of other things that ARE created - companies are created, new products and services are created, new business models are created, distribution systems are created. It is only from these creations that jobs become a necessity - and hiring begins.
No new companies, no new products, etc - no new jobs. When a product is invented, a multitude of jobs are created - manufacturing or development, sales, marketing, distribution, customer service, finance, etc.
But as Freidman observes, without the new companies or new creations - no new jobs.
China understands this, India understands it, Singapore, Korea, Vietnam, Taiwan - they all understand new products and services have to be created in orders for new jobs to result.
And a large portion of new products are developed by engineers - hence one sees 60% of college graduates in Singapore earn engineering degrees. China nearly 40%, India 30% and so on.
In America engineering graduates are approximately 3-4% of all college graduates and many of them are foreign nationals whom our government wants to send back to their home country, so they won't take "American Jobs" - as if there is such a thing as jobs that belong only to Americans.
So, as Friedman correctly points out - if America wants jobs for the nearly 16% unemployed or underemployed - it must educate students and inspire them to careers of discovery and invention as well as invite as many engineers and scientists into America as we can get.
Supply the economy with creative engineers, scientists and entrepreneurs - encourage and support them with start-up friendly policies - and jobs will come by the millions.
The strategic demand is for entrepreneurs, suppliers of demand. When a creature's environment changes, in a way that threatens its health and survival, it demands a strategy of adaptive response. Humans adapt by deciding to adapt, to enact tactics comprising a strategy of adaptive response. We should have been ready to respond to the crises of economics (2008-10, so far) with tactics in a strategy developed over the last 100 years. We should have been able to supply adaptive resources to individuals and companies, human beings and commercial beings whose symbiosis is the crux of economics. Companies supply services and commodities demanded by other companies and individuals. What enables them to do it is human competence. Humans supply their competence in exchange for wages (or barter) which enables them to consume. Employment supplies their capital-economic-connection enabling them to make consumption-economic-connection. Companies supply the capital, infrastructure, and organization to enable production of commodities or delivery of services, transactions with consumers, banking, payrolls, and reinvestment to sustain the process, sometimes for multiple human lifetimes. Babies are conceived, brought to term, and nurtured to self-sufficient survival. Companies are conceived, finally started, and demand the same nurturing to sustain survival. Companies are given 'life' by force of law, as corpora ficta. The commercial being can be assessed as to its state of health. It can be threatened by change, and it can die. It can be killed by competition or deliberate assault, or neglect. Eight of 10 new companies die from mundane mistakes by entrepreneurs who have no access to adaptive resources to supply the demanded adaptive response. It starts with human competence. Develop that resource as THE base resource demanded for every human endeavor, personal or as entrepreneurs, starting their own company, or as entrepreneurs marketing themselves to other companies. They are sole-source suppliers of human competence. Monkey competence won't suffice. Horse sense won't do. Even computers can't replace people. If their environment is threateningly changed, humans demand resources of adaptive response to enable their survival. Government should have education and retraining and relocation resources developed here in the 21st century to enable rapid response to threatening change. Let's capitalize that as Strategic Language, language in a strategy of Adaptive Response: Threatening Change. 'Change' is not a threat simply because it is different. But when the difference is threatening it demands cognizance on the part of leaders (those who 'lead' their lives, who lead families, who lead communities, states and nations, and the human race) of the implications of the change to discover whether it is Threatening Change. We have not enacted tactics of Research & Development to develop the tactics of Adaptive Response. Therefore when millions of Americans lost their homes, and continue to lose their homes, with social implications that are complex and will be long-lasting, we, individuals and governments, were not ready to supply Adaptive Resources in a strategy comprised of tactics of Adaptive Response. Where there is no vision, the people perish. That's the story looking back. Now look ahead.
Posted by: Gary E. Andrews | May 22, 2010 at 07:29 AM