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We are witnessing the arrival of a new economic model that we have yet to understand fully. Although this new, conceptual economic model is unfolding gradually, the knowledge economy is changing rapidly.
The knowledge economy emerged after management guru Peter Drucker recognized a particular type of workforce in the 1960s and dubbed them "knowledge workers." In the decades that followed, the world saw a sharp increase in productivity, giving knowledge workers a higher level of respect and recognition.
The knowledge economy era gave knowledge workers an edge in the general workforce, offering them job security that was unheard during the first half of the 20th century.
These workers are in for a rude awakening in the upcoming decade. This is also true for small businesses, entrepreneurs and large multinationals that fail to see this change coming.
The knowledge economy gave the United States in particular a major edge in sustaining innovation and creating a healthy job market.
The conceptual economy will be different.
Knowledge workers who adapt to the new norm will keep pace; those who fail to change or acquire new skills and understanding will be left behind.
This new economic model will bring new professionals with strong creative knowledge who will understand the need to integrate the "art" aspects of their professions. "Management by Objective" will be taken less literally, and objectives will be created with more foresight and amended continually based on new information.
The transition will be less glamorous than at the beginning of the knowledge economy, but it will sometimes be more methodical and seamless.
The conceptual economy will see new professionals with enhanced but less disruptive skill sets. For example, doctors and engineers will perform their specialized tasks as they did in the knowledge economy, but this time, they will be challenged to use their right brains more in strategic thinking.
The conceptual generation's medical directors will be more technologically savvy than most of the technologists in the 20th century, allowing this new breed to fundamentally change delivering care.
Beyond specialized workers, there will be a new set of conceptual workers whose jobs are yet to be created. Most of what has been offered for free in the knowledge economy will shift to a paid model.
Conceptual consumers will spend less time seeking bargains or free trials and will open their wallets for what they believe adds value.
Social media will heavily influence consumers in the conceptual economy, and peer influence will play a key role in consumer buying habits. There will also be a new market for paid, high-end online content and for validated, authenticated news aggregators.
Startup costs for technology companies will drop sharply. Shared resources and communal work efforts like Linux and cloud computing will be a standard way of building infrastructure. There will be a big shift toward devising new business models to measure, support and train conceptual workers.
As the knowledge worker era began, opportunities emerged for consultants who trained themselves to be experts in consulting to management. (The title later officially became "management consultants," and the likes of McKinsey and Bain amp;Co. came out of that.) The consulting model thrived in the knowledge economy from big three accounting firms to enterprise resource planning consultants to elite management consulting companies that catered to Fortune 500 types.
Future management consultants won't focus on advising companies on processes and methodologies. Rather, they will emphasize human factors and individual human behaviors more often than organizational behaviors.
Managing the new generation of technologically savvy, multitasking workers with short attention spans will be tough. Management will have to learn ways to train human resources departments to recognize and encourage the new norms for this new productive group.
Entrepreneurs may find many opportunities in the conceptual economy and generation. The knowledge economy created an enormous pool of small businesses: 98 percent of all businesses in the United States are small businesses. And the majority of small and midsized companies that fall under this category were the brainchild of a knowledge worker.
There is a tremendous opportunity for conceptual entrepreneurs to salvage these companies, sustaining them long enough to transform them into conceptual, profitable companies.
Basic business rules and timeless wisdom will still apply, of course. It will be important to ignore glamour. Instead, businesspeople should add value where the majority has ignored it. Address pain points. Be disruptive. Learn to defy conventional wisdom and logic. Learn to be a generalist. Adapt, adapt, adapt.
The conceptual workforce should learn that it is useless to do something very well if it shouldn't be done at all.
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After a long, slow convalescence from the Great Recession, the US economy has emerged this year as a major force for global growth for the first time in a decade, even as some of its top rivals struggle.
Despite the sudden loss of confidence on Wall Street last week, the US economy shows little sign of faltering and its solid footing helped nurture a quick recovery in stocks.
Economists point out that US growth took off in the spring quarter with a 4.5 percent rebound from a winter slump and is expected to continue at a healthy 3 percent clip in the second half of the year. That far surpasses the growth rates in Europe and even bests the sluggish growth of formerly robust emerging economies such as Brazil and Russia.
SEE ALSO: Wary Americans: Only 22 percent say the economy is going to improve
Perhaps more important, the US jobs machine got back into action this year, churning out a string of job gains averaging well over 200,000 a month in what looks to be the best year for job growth since the 1990s.
About the only major factor holding back the economy is wage stagnation, but many economists are optimistic that the renewed momentum will prompt employers to start goosing paychecks to attract and keep increasingly scarce talent. Despite flat wages, workers are enjoying a hefty increase in purchasing power thanks to low inflation and plunging prices at the gas pump.
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If youre reading this, its possible youll live for a few hundred years. Maybe even thousands. Even better: you could live those years at your peak physical state.
At first glance, thats an absurd statement, going against the experience of all human history. However, Oxford Universitys Aubrey de Grey, a leading theoretician of aging, believes there is a 50 percent chance that someone alive today will live for 1,000 years.
Aging, according to de Grey, is essentially the lifelong accumulation of molecular and cellular damage throughout the body. Using stem cells, hormone therapies, anti-aging drugs, and more exotic techniques such as body-part replacement or even cloning, de Grey says doctors will soon be able to fix those problems before they can kill you. The idea is to engage in what you might call preventative geriatrics, he says, where you go in to periodically repair that molecular and cellular damage.
Much of the current research in the field is looking at organisms that are seemingly immune to aging, such as turtles, lobsters, hydras, and others, and looking at how these effects could be replicated in humans. If scientists can prevent aging completely, then 1,000-year lifespans and beyond where people only die from injuries could become commonplace.
We already expend much brain power analyzing and discussing the potential ramifications of possible-but-improbable events: catastrophic Asteroid impacts, actually building the Death Star, or even congressional Republicans compromising with Democrats. So why not also consider the consequences of a society that has conquered aging?
Now, extending lives to 1,000 years would change almost everything, from the average size of human families to metaphysical questions about existence. But Im going stay in my lane and focus just on the economy. Here are four possible effects that I can envision:
1. Government budgets, fixed
There is a lot of concern about long-term debt levels. The long-term threats are basically the same everywhere: paying for health care for the elderly, paying for retirement, and a falling tax base due to rising levels of retirees could all overwhelm government budgets down the line.
Most health care spending goes toward treating chronic conditions during old age. If the engineering approach to anti-aging is successful, most if not all of these chronic conditions would be reversible and preventable. Routinely fixing damage is likely going to be a lot cheaper than trying to alleviate the pathologies of aging for decades.
Not only would public health bills fall, but the need for the public to guarantee minimum retirement income would disappear as well. The government could use this potential saving for lower taxes, or they could take their health care savings and send monthly checks to not only the elderly, but to all adults. (The latter is probably a better idea.)
2. A far larger supply of labor
If people dont need to retire due to aging, fewer will. This would put more pressure on a job market already straining from a competitive global economy and automation. Absent government intervention, this could cause some combination of rising unemployment and declining wages.
Its unclear which age cohort would suffer the most. The older but still vibrant cohort could have an insurmountable accumulation of skills and resources that the younger cohort could never compete with. Or instead of accumulating skills and resources, the older cohort could instead accumulate crippling biases and myopia, and become unfit in a rapidly shifting economy. Regardless, the supply of labor would significantly increase.
3. Increased productivity
One of the most notable and disturbing trends over the past 40 years is the growing gap between productivity and wages (in the US and elsewhere). This is likely to continue. International competition will only grow with a rising global middle class. Computers will compete for more jobs. And if life-extending technologies are successful, then those over the age or 65 who used to retire would be able to do any job, only with a lifetime of experience. While this would be tough on labor income, it would also increase productivity.
The question is how much of that increased productivity would be captured by a small elite class, invested in socially beneficial areas (either privately or publicly), or taxed and redistributed to reduce growing economic inequality.
4. Financial planning for 1,000 years
Compound interest is an extremely powerful force, allowing one to accrue a fortune over a life and vaster fortunes over multiple generations. Of course, being able to work and live for a really long time would make saving extremely easy. But what would people save for?
Most lives today follow fairly normal patterns. Your first 20-25 years are learning how to exist in the world and developing skills to prepare yourself for the next 40-50 years of your life. Once you have enough experience, but before you start declining too much physically, you work for money to raise a family and save enough for when you can no longer work. If youre lucky enough to survive this long, you then spend your savings to keep you afloat as your health declines.
If anti-aging research develops as some predict, this pattern could change. The boundaries of growing up and growing old greatly limit our options in life. Our entire physical prime is spent figuring out our career path, earning money, raising a family, and saving. Removing the cap of old-age decline would open up a lot of possibilities. People could choose multiple careers and areas of study. They could also have more freedom over when to raise kids and when and how often to take long breaks (instead of a single retirement and annual small vacations). Your whole working life could change as would the priorities you make at each stage of your life. Heres what a lifespan could look like:
Doesnt eternity sound fun?
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Plosser is one of 12 members of the Federal Reserves influential Federal Open Market Committee, which monitors the economy and charts monetary policy. It meets eight times a year and its statements are dissected by the financial community for insight into the future of interest rates and the economy.
He spoke to about 150 people at an address sponsored by the Lehigh Valley Economic Development Corp., offering his assessment of the economy and laying out his philosophy on the Federal Reserve Banks approach to setting and telegraphing its decisions on future interest rates.