Joined Nov 11, 2007
31,929 Blog Posts

State of the Union: Get Used to it Kid

“Americans keep hoping for a robust recovery — one that delivers better-paying jobs and decent returns on retirement savings. Changes in technology and the economy may require that never happens, and government efforts to improve conditions often multiply the misery.

In 1908, Henry Ford had a great idea — the Model T — and a novel understanding of mass production, but needed huge amounts of capital to build factories, establish dealers to sell and service mass-produced cars and maintain a large corps of managers and assembly workers.

His success inspired competitors and whole new industries making everything from agricultural implements to zippers. For three generations, those created enormous demand for capital and jobs for millions in manufacturing and supporting services.

In the closing decades of the 20th century, rapidly advancing digital technologies helped those industries use factories more efficiently and slash the numbers of managers and assembly workers needed.

Most digital companies never had quite the same appetite for capital and workers.
Google was founded in 1998 with $100,000 in seed capital, and $25 million in funding a year later. Within five years, its search engine was available to virtually every computer user around the world, and its brand was more ubiquitous than Coca Cola.

Google’s outstanding stock is worth approximately $370 billion — more than five times Ford’s stock — and it has accomplished this remarkable wealth creation on a relatively small initial investment. Today it has approximately 50,000 high-skilled employees — less than one-fourth of Ford’s workforce, which has been significantly downsized in recent decades.

Older enterprises like Ford and younger ones like Google that form the manufacturing and technology economy of the 21st century need more tech-savvy workers than universities and community colleges provide. However, even if enough liberal arts and business programs could retool to produce all the science, math, technology and engineering graduates needed, the remaining programs would still produce many more non-science, technology, mathematics and engineering graduates than the economy could absorb.

Similarly innovators often don’t need a lot of money to create valuable new enterprises or expand established businesses. Consider that many young people create profitable apps and marketing platforms on their laptops, and major corporations are flush with billions in cash and too few opportunities to deploy it.

Consequently, established companies and individual investors bid up prices for young enterprises, whose owners wish to cash in on their initial success….”

Full article


[youtube://http://www.youtube.com/watch?v=Yd60nI4sa9A 450 300] If you enjoy the content at iBankCoin, please follow us on Twitter