What’s the Latest Development?
Disappointing job creation numbers have stemmed the tide of economic recovery and have economists scratching their heads. But something entirely new may be lurking beneath the surface of our limping recovery: The Second Economy. This computer-intensive portion of industry is growing by leaps and bounds, creating a new generation of billionaires and shaping how our economy may run in the coming decades. Unfortunately, the Second Economy will not create many jobs. Instead, it is creating a broad network of interconnected machines that manage an increasingly automated consumer economy.
What’s the Big Idea?
Online retail sales alone, which are controlled entirely by computers, accounted for $200 billion in 2011. Amazon and Google combined for another $88 billion in transactions. But those fortunes are less encouraging than ever: “In the past, every million-dollar increase in economic output generated on the order of ten jobs. In the future, in the productive Second Economy, it may generate only one or two.” Absent in political discussions of how to create more jobs is the simple recognition that computerized technology is creating a deep structural change in the 21st century economy.
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