Next New Thing...

In light of unemployment remaining at 9.1% as of last week, a CNBC headline caught my eye: US Has 3.2 Million Jobs Openings. The article says that as long as we fill these jobs, we can bring down the unemployment rate by 1% without spending a dime of the tax payers money on the creation of new jobs. This is when sensationalist journalism takes over and the claim not being rooted in facts. This alarming statistic has to do with fundamentally structural problems with the U.S. economy, and the unemployment rate cannot simply be lowered by filling those jobs. The problem has do with the discrepancy between the skills needed for the job and the skill set of the population. The jobs simply cannot be filled.

It's about a concept of specialization, which has gone through all societies tracing back to the hunter / gatherers. Some of the primitive people became hunters.... and other became gathers. They then focused on their own jobs and society progressed. The problem with the U.S. (or global) economy is that the work force was never properly trained for the specialization. The specialization is required with new technologies, new systems, and business models.

How did this problem seem to occur so quickly if it is and has been structural problem? It's actually been a problem for quite some time. However, due to the Fed / Wall St. feeding one bubble after the next (dot com, real estate, credit market, etc),  the issue with our workforce not being properly trained did not seem to be a problem. These bubbles were able to hide structural problems by masking growth and keeping it artificially high. When times are good, businesses expand and hire anyone they can get. They don't necessarily need the right person for the job, but hired anyone willing to do the job. As much as I talk shit about my industry, Investment Banking does fuel businesses. M&A activity (counter-intuitively) creates jobs. Availability of capital (cheap credit markets coupled with open equity markets) funds growth. Everything was going so fast, workers were exactly properly trained or even competent for the job at maximum efficiency.

We indeed are in a special time different from all other decades, and centuries. Because of technology, progress happens at an exponential rate (as per Moore's law). The problem is that the workforce didn't adapt to this technology. The people who did are the few guys in Silicon Valley that made a shit ton of money and are not even really all that talented (or even all that smart). They had an edge over the general population because they were the only ones who could take advantage of the progress and the new opportunities. Their skillset is rare, and are being overly compensated for it (eg internet start up company valuations).

Anyway, I predict the next big thing to be training the work force to understand the technology, new business models, and processes. Most likely, there will be a boom in human resources companies that train employees.

But then again, what do I know? I only predicted the rise of Netflix in 2005 (along with the downfall of Qwikster), the growth of Chipotle as a franchise brand, and the ubiquitousness (?) of the iPod since 2003. #notconceitedjustconfident

What else do I think will be #trending the next few years?
+ The rise of Los Angeles as a major cultural hub and the next cool place to be
+ General acceptance of organic / healthy foods
+ Asia as the next big financial hub (give props to Daddy Chang for this one for thoroughly convincing me) 
+ Internet security (refer to a previous blog entry about this)
+ Integration of location based services (for social media, mobile application, advertising)
+ Product placement embedded into entertainment (i.e. whole season of Entourage to promote a tequila brand)