Tuesday, December 7, 2010

When American jobs are threatened it’s time to level-up & get social

  • American job losses will continue due to a convergence of big forces including offshoring and automation driven by accelerating change.  Service sector jobs will generally not return.
  • Social web business models are flourishing and point the way to new jobs and efficiencies.
  • A new class of Super Prosumer companies like Groupon are poised to explode and return more value to people, creating more jobs, but driving price points lower.
  • We need to encourage the development of Super Prosumer companies on U.S. soil across various industries and become a Prosumer Nation.

Like Scott Pilgrim, America needs to Level-Up.
The erosion of traditional American jobs continues unabated and we can expect it to steadily worsen.  From a macro perspective, there is simply no silver-bullet counter to the converging forces of globalization, automation, overvalued real estate prices, national debt, mega quantitative easing (printing more U.S. dollars to buy back our bonds so they don’t tank - a new round of $600 billion has just been proposed), mounting international resistance to U.S. monetary policy, massive overseas spending (Iraq, Afghanistan) general inefficiencies in govt, defense, education, oversight, and social services.  Despite weak signs of life in the country’s massive services sector, which comprises an astounding 80% of U.S. jobs, last week’s dismal jobs report reinforces the steady downhill march.

Though the timing is obviously unfortunate, this should come as no surprise. Forecasters like Alvin Toffler have been pointing out the inevitable shift to the Knowledge Age and post-industrial society for some 30 years already, while others like Martin Ford argue this transition is likely to be very disruptive and and downright Schumpeterian due to the rapid labor displacement that’s being catalyzed by accelerating technological change.  Well-established generational dynamics like Strauss and Howe’s Fourth Turning further strengthen the argument that we’re in the very early stages of a nasty, punctuated socio-economic transition.

So, what can we do to preserve American jobs and our way of life?

First, we need to come to agreement on the root causes of the problem - a handful of which I have listed above.  Since our political system is clearly incapable of achieving this level of dialogue, due to a phenomenon that Jonathan Rauch aptly labels “Demosclerosis” (thanks to ASF President John Smart for the excellent reference), it’s now incumbent on us, as individuals and local community networks, to Level-Up our understanding of the big-picture socio-economic dynamics.  Now that the shit is hitting the fan, the time is ripe for productive dialogue, which must replace polarized political rhetoric if we are to successfully adapt to the accelerating change that is obviously transforming our world and digesting American jobs.  At the very least, establishing a better sense of accel-aware context can help tell us what NOT to do, and what NOT to waste resources on.

Once we get on more-or-less the same page, we can then either 1) move on to meaningful policy debates and attempt to bend politicians to our will or 2) work around them.  Because it’s so difficult to achieve mass consensus, it seems fairly obvious that we must start generating creative solutions locally, at the community level.  Fortunately, the same technological change that’s contributing to American job losses is also sparking the emergence of a host of powerful new tools and economic models that grass roots change agents can take advantage of.  If our goal is to save American jobs, then it’s our responsibility to identify, vet and selectively apply these emerging solutions.

First and most obviously, we can turn to well-established, leading-edge American tech and web companies like Microsoft, Google, Apple, Intel, Cisco, IBM, Johnson Controls, Amazon, EBay for software, hardware and intelligent systems that can bring down personal and business costs and increase profit.  Google Apps, Maps and embedded Search can help save money and form new businesses.  IBM’s Smart Infrastructure can reduce municipal sewage and water costs.  Amazon and EBay can serve as powerful distribution channels for small businesses and entrepreneurs.  And so forth.  These are all solutions we need to become more familiar with so that we and our local communities can effectively implement them.

Then there’s also a new class of social web companies that are already playing a more direct role in generating income, savings and new behavior - especially at the local level.  These include the likes of YouTube, Facebook, Twitter, Yelp, Groupon, and Foursquare, just to name a few.  These companies offer tremendous marketing and content value and can only exist now that we’ve built the layer of high-speed internet and rich web infrastructure necessary to support them.  And, believe it or not, some are growing even more quickly than the likes of Google.  For example, tech blogger Kara Swisher reports that “Groupon’s run rate for this year is clocking in at $2 billion in revenue [offering] insight into why Google has been willing to pay up to $6 billion to acquire Groupon.”  

This is a MIND-BOGGLING figure, especially for a company that many scoffed at not too long ago and that initially set out to “organize collective action around social or charitable causes”.  Never before has a company reached $2 billion in annual revenue in just 2 years time.  Never before has a company been offered $6 billion just 2 years into its existence (other than spin-off companies).  

Particularly interesting is the trendline of valuations.  Going back just one decade we can see acceleration at work.  Youtube was purchased by google for $1.65 billion after just 18 months of existence.  Farmville creator Zynga is said to be worth $5.5 billion just 3 years into its life.  Secondary market shares of Facebook are reported to be trading at a value of $50 billion after 6 years. And now Groupon has claimed the crown of fastest growing company in the history of planet Earth. The speed at which a company can be organized and scale is clearly accelerating.

Even more interesting is the symbiotic relationship these companies have with their customers.  Each and every one of them fundamentally depends on user generated content and participation to function.  Therefore, they inherently must make the cost of participation as low as possible, and the benefits to users as high as possible - a phenomenon I like to call The Mandate of Kevin.  This is their bread and butter.  YouTube returns value in the form of attention and ad revenue.  Zynga provides a web of social interaction and virtual gifts from co-players.  Facebook returns value in the form of a rich, easy to navigate social graph, marketing opportunities and great technology (they’d lose users the second they fell behind in technology, as Friendster and MySpace did).  And it’s no surprise that the fastest horse out of the gate, Groupon, returns the most value of them all to businesses and organizations in the form of direct revenue in exchange for participating in the group discount schemes.  

It’s logical to predict that their successors will be more dependent on large groups of value-adding participants, aka prosumers (producer + consumer = prosumer).  Which means that the power will continue to swing in our direction, resulting in larger pay-outs and more direct value, while the sites themselves become even more user-friendly and integrated with other systems (like Facebook, Google, and Twitter) that we already use on a regular basis.  Leading-edge companies like Google are acutely aware of this.

Such prosumer-centric models will steadily trickle down to all sorts of industries and purpose networks.  Some early examples include iphone apps that turn street mapping into a reward-driven game, online stock markets that predict box office scores more accurately than experts, and social health networks capable of determining the effectiveness of new drugs years before clinical trials can accomplish the same thing.

Stepping back again, we can see that at the very heart of this transformation of opportunities is acceleration in the networking of human beings and the ability to put more brains and bodies to use more effectively in more ways - the social side of accelerating change.  Key to this is the ongoing deployment of mobile computer devices, which currently manifest as the smartphones we carry around that allow us to connect to other people and data in real-time.  These will continue to augment the reality around us (if we want them to), bringing more of the web into the world and linking more of the world to the web, and enable more socio-economic opportunities that have been impossible up to this point in human history.  Thanks in large part to some accelerating price-performance curves like Moore’s Law, we are truly living through a momentous shift that’s going to proceed far more quickly than most of us presently imagine.

One result of this possibility expansion will be the ongoing emergence of a new class of Super-Prosumer companies that will fill much of the void left by dwindling American jobs.  As the traditional economy flounders, these social web companies will clean-up (they already are) and expand the phase space for massive, rapid value creation like never before.  It brings to mind the Cambrain Explosion 600 million years ago and the dinosaur-to-mammalian transition 50-60 million years ago, both prime examples of a spurt of species destruction quickly followed by rapid new growth that can occur in systems when the conditions and timing are right.  We are now living through a similar period in history.

To take advantage of the disruption and minimize the downside of accelerating change we must act like mammals at the end of the dinosaur era.  We must learn to actively seek out and generate new opportunities, especially locally.  As the barriers to participation and creation fall we can use new technologies to easily create our own apps, build complex simulations, create custom animations and cartoons, better map and monitor the planet, earn money for our photos and vids, create powerful mobile on-the-fly action networks, earn money by turning people on to deals, reduce emissions and earn money by renting out our cars, and so forth.  The list goes on and on.

My near-term hope is that the explosion of opportunities will create more jobs than it destroys while reducing resource consumption along the way.  But now that the game is cracking open and more people all over the world can participate it seems far more likely that we will not be able to replace the American jobs that we are losing quickly enough to minimize the negative short-term economic effects.  That’s just reality.  We as a nation have over-extended, over-borrowed and over-diluted our currency, and at the same time fallen behind in education and technical acumen.  All while the rest of the world has learned to do what we do better and cheaper.  So, even as we do make the transition, it will be at a lower wage price point than we are accustomed to.

There is however a silver lining to the tale. The United States is a creative nation that can benefit greatly from the entrepreneurial spirit woven into our national storyline and from the presence of the abundant prosumer-oriented companies that have already sprung to life here.  If we can learn to more quickly learn from these examples and the potent new models that are emerging every single day, then we can and will recover our edge and relative income.  If not, then we will see much value flow outward, off-shore and be left to hope that accelerating change will raise all boats even as others seize the opportunities that we could have seized.

By understanding the nature of accelerating change, globalization, automation, creative destruction at the national level, and emerging prosumer models we can figure out how to individually and collectively adapt to the times.  As the world shifts, the individuals, communities, cultures and nations that upgrade their maps most quickly will have a big edge.  People who understand the shift and the new tools will be able to do more with less and pull value toward them. They will be the ones to create and take advantage of the new Groupons and Facebooks.  That said, the competition will be fierce, the price points will be lower, and the performance metrics more accurate.  As a result we’ll need to become increasingly multi-modal, willing to work on-the-fly, become accustomed to low job security, and be willing to engage in an increaingly web-mediated economy.  We'll need to become a nation of Super Prosumers.

If we can sufficiently level-up our map of the system and social web then we will surely learn to leverage our voices, feet, dollars and networks to increase personal and local opportunities in unexpected and astounding new ways, thus repositioning America for new jobs and growth.


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Alvis Brigis is a media strategist, writer, and entrepreneur focused on the social side of accelerating change.  He is currently CEO of a stealth mobile content start-up, Board Member of the Acceleration Studies Foundation and a weekend bartender.

About Alvis Brigis

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Alvis Brigis is a media specialist and futurist residing in California. Most recently, he was Story Producer on History Channel’s Invention USA and Executive Producer for The Future of Facebook, the first Open Foresight project to be funded and released to the public. He’s produced and written for TV networks including NBC, VH1, THC and Sundance Channel. Brigis co-founded Future Scanner (a prediction harvesting tool), Swarmado (a mobile content-sharing app for events) and has developed a variety of forward-looking startups. He serves on the advisory board of Acceleration Studies Foundation and blogs about the social side of accelerating change at Social Node. He’s also an avid sci-fi, comedy and quest adventure writer.