Commuters on their way to work in Bangalore’s Electronic City Bangalore, India, April 2009: Everyday Hosur Road feeds thousands of workers into Bangalore’s Hi-Tech Electronic City. Beside the roadway the ‘music of the streets’ is almost deafening; the drone of a 2-stroke 3 wheeled taxis is punctuated by incessant horn-beeping as workers pour into the […]
A Generational Tide Has Crested
The baby Boomer economic tide is going out. Boomers have been a major economic force for the past half a century. This population surge, composed of the 78.2 million Americans born between 1946 and 1964 has virtual control over the U.S. economy, which currently accounts for almost 25 percent of worldwide gross product. Beginning after the Second World War, the generations that followed have transformed the economic landscape of the world. Spawned with a keen desire for education, growth, and opportunity, the Boomer generation rebuilt the world, and brought it into the twenty first century. It was always understood that this generation would mark a high tide someday. What has become clear in the past few years is that this high tide was artificially made higher by a credit boom and bubble cycles. And this tide is now going out with a vengeance. This fact – the baby boomers bust cycle – will be a dominant economic factor for the next several years.
Most of you have realized that our economy – in fact, the world economy – is moving through some large structural changes. Because the explanations of these phenomena change from day to day – even from our top leaders – you realize that the situation is not well-understood by anyone.
You also realize that the scale of events and consequences is so significant that it isn’t a good idea to remain blissfully ignorant and dutifully silent. So you scan the Internet looking for clear, actionable, balanced, unbiased information. We are all searching for clarity, but it seems the more you read, the less clear the subject becomes.
In late fall of 2008, someone on Nouriel Roubini’s RGE blog asked “what is the core economic problem we’re facing?”. Forty-three different people replied, and there were nearly forty different answers, many of which seemed perfectly plausible. It’s not just the lack of agreement on the problem that’s remarkable – it’s the fact that some of the nation’s smartest and most informed people congregate at the RGE blog. What if the question had been asked at the supermarket?
How Information Flow is Shaping the Economic Landscape
The Internet has radically changed the availability and cost of information. The Internet isn’t just moving advanced technology across town, or across the nation. It’s moving it from one nation to another, from areas of high concentration of technology to areas of low concentration. It is leveling the playing field.
This revolution of information access is at least as important as the other major revolutions, such as the Industrial Revolution of the late 19th century. The graph below shows the exponential growth in access to information via the Internet: