What’s this “great inflection?”
It’s “the mass diffusion of low-cost, high-powered innovation technologies plus cheap connectivity. They are transforming how business is done,” Friedman said.
Coupled with globalization, the great inflection “has transformed how goods and services are bought and sold, made and designed,” Friedman wrote.
“This merger makes old jobs obsolete faster and spins off new jobs faster, but all the good new jobs require higher skills.”
Friedman reports that through the 1970s America ensured its workforce kept pace with technological change “by steadily expanding public education.” But, when changes from globalization and IT began accelerating after the 1980s, we slacked off.
“Our high school graduation rates stopped improving and our growth in college graduates slowed substantially – far below what we need for rapid growth and shared prosperity,” Friedman says, quoting Harvard University labor economist Lawrence Katz.
This is when the downside of “the great inflection” began, he says.
“What did we do?” he asks, then, answers.
Rather than invest to reduce our education deficit, we built a false economy for unskilled workers. Through “massive injection of subprime credit” we created large numbers of “home construction and retailing jobs.” This was fostered by a Wall Street that reoriented itself into an industry obsessed with creating and funding “unproductive financial instruments.”
Then, “the great inflection” met “the great recession.”
The credit-driven, false economy shattered and the real economy stumbled.
Friedman sees great potential for continued stumbling.
Western societies have for years underinvested in education, he says. As America’s rank in educational performance fell in global rankings, “we convinced ourselves that our traditional global edge in entrepreneurship and innovation could compensate for our declines in educational attainment.”
“They can’t,” says Friedman.
“Many Americans understand something is very wrong,” he writes, and is of uncommon scale. As such, politics as usual won’t meet the challenge.
Friedman says America needs “job-creating infrastructure investments tied with a program to stimulate more start-ups tied with a credible deficit-reduction plan – that would be phased in as the economy recovers – tied with a plan to get more Americans postsecondary education.”
He sees neither presidential candidate candidly addressing the challenge or proposing solutions. “If neither does…the country will lose by a mile.”
Rather than listening to political word smithing intended to overwhelm us during the last days of national campaigns, listening to thoughtful words like Friedman’s might be of more benefit.
Bill Crawford (email@example.com) is a syndicated columnist from Meridian.