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Why I am so optimistic – 3

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The future is so bright we need sunglasses. Image courtesy of DollarPhotoClub.com

The future is so bright we need sunglasses. Image courtesy of DollarPhotoClub.com

The number of people working in manufacturing has been declining for many years. Those job losses will continue at the same time as technology disrupts other industries causing the loss of more jobs.

This is not a new concept. Technological advances have devastated farm employment over the last 150 years.

(Cross-post from my other blog, Nonprofit Update.)

Prof. Thomas Tunstall pondered Where the New Jobs Will Come From. Sub headline on his 11/4/15 article said:

In 2007 iPhone application developers didn’t exist. By 2011 Apple had $15 billion in mobile-app revenues.

Consider the percentage of the population employed in agriculture over time:

  • 1840 – 70% of all workers were employed in agriculture
  • 1900 – 40%
  • 1930 – 20%
  • 1970 – 4%
  • 2015 – 2%

Does that mean that 68% of the workforce today is unemployed? Because there is no work on the farms, there is nothing any of us can do?

Not quite. All those workers moved into new industries which were not even foreseen before they developed.

Prof. Tunstall points to outsourcing and productivity as the drivers for the decline in manufacturing jobs.

Many jobs have been outsourced elsewhere in the US economy. Payroll, IT support, customer support, and other functions are now performed in other companies. That work did not go away – it just doesn’t get done in the manufacturing sector now.

Productivity improvements are phenomenal. He cites interviews conducted at his university which revealed a $120M manufacturing plant would only have 50 jobs after construction is done and a $100M natural gas facility that will employ two dozen people.

Consider that again : two heavy industry facilities with combined cost to construct of $220,000,000 will employ around 75 people at full capacity.

Where then will the new jobs come from?

Prof. Tunstall says they will be in service industries we cannot even imagine today. Industries we can foresee would include cybersecurity, cloud computing, sequencing of genes, and analyzing the massive amount of data that is gathered by companies. There will be many other incredible opportunities that we can’t even guess at now.

Check out the full article.

The transition will be painful. We as a society will need to figure out how to help a lot of people make the jump.

Unless the politicians and regulators shut things down, the economic future is incredibly bright.

That’s why I’m so optimistic when I take my eyes off the political news and this morning’s economic headlines. I need sunglasses when I focus on the open frontiers of technology, publishing, private space exploration, and energy production.

Previous posts: Part 1 and Part 2.

Written by Jim Ulvog

December 31, 2015, 9:23 am at 9:23 am

Posted in Economics, Pondering

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