A Constantly Changing Economy

The main business Michigan Future is in is trying to understand the flat world and then be a catalyst to better position Michigan and its citizens to prosper in that economy. Our core belief is that the people and communities that will do best economically are those that align with – rather than resist – new realities.

Globalization and technology are the mega forces that are flattening the world and making the old economy obsolete. And they are ongoing forces for change. This isn’t about adjusting to a new reality and then prosper. But rather constantly adjust to new realities.

The person who has helped me understand this the best over the years has been New York Times columnist Tom Friedman in his books the Lexus and the Olive Tree and the World is Flat as well as his Times’ column. In a recent column he illustrates well how much the global economy keeps changing. Its worth reading.

He tells two stories one about a friend in the marketing business who is able to produce a quality product for about twenty percent of what it used to cost him. Largely because of free/low cost internet services. And the other about Ethan Allen, the home furniture manufacturer. Which is surviving in these down times by cutting its workforce by twenty five percent, sending its routine manufacturing work to Mexico and using technology to get much more productive. It can do now in three hours what used to take twenty.

Both of these stories are about globalization and technology constantly changing how products and services are made. The new reality is that machines will increasingly do what humans use to and that more and more people from across the planet will compete with us for jobs in all industries and at all skill levels.

So increasingly the only path to prosperity for each of us and our communities is to be innovative. Constantly changing to create what’s next. Trying to hang on to what made us prosperous in the past is now a path to a declining standard of living – getting poorer. Real scary, but the new reality!

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