Advanced Computing in the Age of AI | Thursday, October 6, 2022

Change is in the Air 

<img style="float: left;" src="http://media2.hpcwire.com/dmr/465px-Factory_USA.svg.jpg" alt="" width="81" height="67" />You might have heard that the American economy is in trouble. And as the years drag on, a harsh reality is coming to light: this is no normal recession. The various collapses of recent memory – housing, banking, credit, dot-com – are symptoms of a larger problem...

You might have heard that the American economy is in trouble. And as the years drag on, a harsh reality is coming to light: this is no normal recession. The various collapses of recent memory – housing, banking, credit, dot-com – are symptoms of a larger problem. And regardless of where you sit on the political spectrum, there’s plenty of blame to pass around. From wars we couldn’t pay for to social programs mired in ancient bureaucracy, a lot of things have gone wrong lately. And fixing it, we’re coming to realize, means a complete reevaluation of our economy; to treat the disease, not the symptoms.

At Forbes, Steve Denning suggests that the entire U.S. economy is about to undergo what he calls a “phase change,” a complete restructuring of how the country’s economics work. Historically, successful nations maintained a Manufacturing Economy: they built stuff, and their national and fiscal strength was based on the building of stuff. The Manufacturing Economy has been a proven model going back hundreds of years.

Ever since World War II, however, the United States has been transitioning to a Service Economy – one in which we build less and less stuff, and our activities are based in intangibles like investing and business processes. Manufacturing and skilled labor dwindled in importance, blue-collarism became stigmatized, and the rise of cubicles made a nation of executives.

It hasn’t worked out that well for us.

TV personality Mike Rowe spoke to Congress last May and practically begged for greater investment in skilled labor training in the U.S. “Sometime soon,” Rowe said, “an hour with a good plumber is going to cost as much as an hour with a psychiatrist… by which time we’ll probably need both.”

In the 21st Century, though, the Manufacturing Economy isn’t the answer either, or rather, it’s not the whole answer. Denning calls for the rise of a Creative Economy, in which both manufacturing and services play a role:

“It is an economy in which the driving force is innovation. It is an economy in which organizations are nimble and agile and continually offering new value to customers and delivering it sooner. The Creative Economy is an economy in which firms focus not on short-term financial returns but rather on creating long-term customer value based on trust.”

As for me, I’ve been calling the same concept a “Knowledge/Manufacturing Economy,” but there’s no point in quibbling over names. The point is that modern nations wishing to restore their competitiveness in the global arena must focus on innovation, technology, and intelligent reactions to market forces. Let the assembly lines stay in China, but the breakthroughs – and the skills that will spawn them – should stay on our shores.

To be honest, the United States is woefully unprepared to shoulder this transition, but shoulder it we must. We’ve got to get our heads around the reality that what had worked just fine won’t work moving forward. The Manufacturing Economy we maintained from the 1850s through the 1940s was great for the time, but those times are long past. The Service Economy we’ve had going since then… well, it’s best not to talk about that. Denning and economist Joseph Stiglitz both advocate massive investments leading to cultural shifts in education, in business practices, and in the way we approach our long-term economic fortitude. If we’re going to stimulate something, let’s stimulate it in a forward-looking direction.

What has so far not materialized is a concise plan of action for making this work. The country needs a bold new policy that lays out explicitly what the investments will be and where they’ll go. Plus we need to get a cultural change through our heads; abandon the 20th Century mindset of short-term success with no eye to long-term effects, and change that’s ponderous and complaining, when it happens at all.

Nimble. Agile. Fierce.

We are technologically in a position where we can see the whole picture, and even simulate the possible outcomes of any proposed strategy. Economically speaking, so far we’ve been slapping Band-Aids on a cancer. And solutions that play to things we know only worked in the past are not solutions at all. The world economy is changing into something entirely new. We know that America has, can, should, and must lead the way in technical innovation; to that let’s assume leadership of the looming economic revolution.

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