Surviving Post-Scarcity

I’ve been reading the “Beyond Scarcity” series on FTAlphaville recently, and it’s made some very interesting points. The posts argue that the current economic environment is deflationary with regard to goods. I think that is true, and one of the reasons is because of technology. Firstly technology is constantly making everything more efficient and because of global competition this is both reducing the production costs and making goods cheaper. Secondly technology is causing structural unemployment, which means less people have money to spend and there is less money flowing around the economy. Other factors causing deflation are the tight monetary conditions, the aging population, and potentially the effects of quantitative easing.

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Long-Term Unemployment and Job Prospects

There is a very scary article on the Atlantic about how you essentially become shunned by employers after 6 months of unemployment. It is about an experiment by Rand Ghayad of Northeastern University. He applied for 600 job openings using fake resumes, within which he varied 3 factors – how long the applicant had been out of work, how often they had switched jobs, and how much experience they have. What he found is that how long you’ve been out of work is the most important thing that employers look at. People prefer to hire someone with no experience, than someone that has been out of a job for more than 6 months. Scary stuff.

Developers as Capital

I’ve just been reading this Forbes article called “The Rise of Developeronomics”. The author argues that because increasingly software is the core value proposition that differentiates companies from each other, that software developers are more and more becoming the wealth creators in society. The author recommends investing in software developers as a way of leveraging your own capital. This article builds on an earlier article by David Kirpatick called “Now Every Company is a Software Company”.

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Race Against The Machine

I just finished reading the Kindle book Race Against The Machine, a book I thoroughly recommend. This was the driver of the NPR article I blogged about recently.
The book is mostly oriented towards the US, although the issues they discuss seem to be prevalent across all major economies. The authors make the case that technological improvements are severely impacting every job market except those for highly-skilled individuals.

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