I'm listening to the news this morning while working and thinking about what Steve Rattner, New York investment asset manager and economic commentary, was saying about a slow down in hiring. He could very well be correct in some of his predictions and warnings. As companies adapt they shed old systems and move more toward more effective emerging platforms such as virtual business structures. The virtual can make us more productive and lessens the need for costly physical presence (i.e. large office building).
It should be noted we will also find there are certain types of businesses where physical proximity during the day impact performance in a positive way. Each industry will create its own standards (more virtual or physical) based upon shared modes of business that allow such companies to work together effectively within a supply chain.
I wonder how long this employment trend will continue as we also know that Digital GDP can speed up economic activities as organizations (and transactions) migrate online. Innovation is 3X faster with new capital investments than R&D alone. Thus the 2-5 year lead time on investments may mean we have a bump in economic performance and then a bigger bump a few years down the road as changes take full effect.
The increase in productivity and virtual adaptation may balance out job loss with a followed up job gain. As we add new virtual jobs based on lessened need for physical presence which reduces our costs and increases profits. That money will likely be reinvested into markets that are growing thereby encourage greater structure changes and improved virtual effectiveness.
Its this market adaptation that will raise job opportunities in new markets and slowly suck the resources out of an older system. For example, high technology manufacturing is going to take resources from other market sectors that are less profitable and put them where emerging patterns. Jobs may open up in new sectors faster than job loss if our society is creating net positive value.
These faster market changes is one reason why higher education institutions must increasingly be adaptable...which is one reason for the market based competency approach of online higher education system a couple of colleagues and I worked entitled Aligning Curriculum to Industry Needs.
As we move through this transition we must make sure we are re-educating people to perform at their maximum capacity in industry and economic platform. There is so much that can be said here about two world society. The highly educated working virtually and the less educated stuck in jobs that require heavy physical presence which continues to leave them with the short end of the stick (i.e. generational poverty).
To rectify this new problem we will need better online education models that will allow more people to become educated at a lower price structure. Societal adaptation occurs when we are able to push people to learn new skills and then apply them in the workplace. The technology is there to educate America's labor force for mass societal transition into the digital world.
The chaos we experience is because we are changing our economic structure, societal structure, technology capabilities, higher education modes, etc... at one time. Trends have been moving in that direction for a long time and the Pandemic sort of launched us only half prepared into the Gail. As things begin to settle down we will see interesting economic changes.
I'm waiting for 2020 Q3 to come out because I suspect that by the end of that Quarter we should see jobs, economy, and other things on an upward trend that in turn should be a powerful 4th quarter. Next year could see other economic improvements as people return to work and the economy speeds up with these new adaptations. A few years down the road we might see significant jumps in GDP; depending on government policies. All of this is dependent on how things turn out.