No new economy -but second economy
Now something new IS coming again. This time it second economy. The term was coined recently by a technology thinker W. Brian Arthur. He made the bold case: the second economy will be larger than our physical economy by 2030. So what is this economy?
That is everything that happens beyond our sight. When we get to the airport and put our card into machine to check for the flight, what happens? incredible amount of information exchanges when your identity is checked, your seat reservation is made, your luggage information is given and so forth. Machines talking to other machines. Some decades back this was all done manually.
Now a new study, commissioned by General Electric, says connecting industrial operations to the Internet could lead to significant gains in productivity, potentially worth $10 trillion to $15 trillion globally. Downsize of this potential is that it will happen largely without any new job creation. Because in this second economy, machines do the job, as Karl Marx once prophesied. When in old economy every million in economic output meant 10 jobs, in the second economy it means perhaps only 1-2.
This is exactly the reason why companies like google or amazon are doing so well. They really ride the wave on this second economy.
In addition of being good in this business we should also focus much more on distribution of wealth in the future than making it. The machines will do it for us.