Students: It’s Not Your Parents’ Economy

The following is an excerpt from my new book, "Dream Differently: Candid Advice for America's Students."

[If you’re in college or high school today, you’ve] never known a world that didn’t have the internet, but consider this: the world economy has changed more between your parents’ generation and your generation than anything we’ve seen since the invention of electricity. Think about that for a moment. The considerations, problems and solutions with which your parents had to contend when they were your age are from another world. Yes, some problems and lessons are universal and don’t change. But so many of the skills necessary to compete and thrive in today’s economy weren’t important when your parents were in school.

It took about thirty years for the refrigerator to become a staple in every U.S. home, according to the Harvard Business Review. It took nearly sixty years for 100 percent of U.S. homes to have electricity. Other older technologies like the telephone and clothes washer likewise became commonplace over several decades.

Compare those slow rates of adoption to the cell phone, which took only ten years to reach 90 percent of U.S. homes. That’s an astonishing rate of adoption, and it’s only getting faster. Take the smartphone, probably the most important piece of technology you own. The smartphone is the fastest adoption by U.S. households since television. And we don’t just see this in the United States. As a Harvard researcher notes, in 2001 the developed world had six times as many mobile subscriptions per capita as the developing world. By 2011, the gap had shrunk to 50 percent more phones per capita. “Of the world’s six billion mobile-phone subscriptions, 73 percent are now in the developing world, even though those countries account for just 20 percent of the world’s GDP,” writes the Harvard researcher.

Much like the immensity of our own physical universe, the effect this explosion of data has had on the economy is hard to appreciate. Yet one thing is certain: the digital data revolution has fundamentally transformed the way the economy works. In turn, this has affected how companies operate, which, lastly, has affected the type of skills an employee needs to compete in this new world.

Which also means that in two years, when the amount of digital data has doubled in size yet again, the economy will look different than it does today. How in the world can anyone hope to keep up? The simple answer is that a lot of companies and workers aren’t keeping up at all.

The Great Destruction

The reality is that all this transformation has led to some unfortunate consequences. Economists refer to this issue as “creative destruction,” by which they mean that innovation and newer technologies render older technologies obsolete. For example, have you ever used a typewriter? Thirty years ago, typewriters were more common than computers. No one uses them anymore. An entire industry, one that had been around for more than a hundred years, is gone completely. Vanished!

But does anyone miss the typewriter? Is our world worse off because no one uses a typewriter anymore? Not at all. No one would trade his PC for a typewriter. That’s creative destruction. Of course, it’s not just typewriters. The most recent and telling example of creative destruction is the stunning rise of the ride-sharing company Uber. Founded in San Francisco in 2009, Uber now operates in nearly sixty countries and about three hundred cities worldwide. Uber has thrown the global taxi-cab industry into chaos. I have no doubt you’ve been in a traditional taxi, but your children probably will never have to “hail” one on the side of the road.

It’s not that the taxi companies couldn’t have used the same technology that Uber uses. But they thought that their industry was safe. They didn’t see the need to change, to adopt the newer technologies, because there was no reason to. Then Uber came along, and suddenly there was a reason to change with the times. That’s the thing about this new economy you’re about to enter: it loathes stagnation. From the beginning of history, companies have had to adapt to newer technologies and different customer demands. That hasn’t changed. What’s changed is how quickly this happens today.

The surge of data and transformational technologies have forced companies to become less resistant to change. They must change if they want to survive. But to do that they need employees who appreciate the importance of moving forward. They need employees who appreciate how the explosion of digital data has forever transformed the life-cycle of businesses.

Vince M. Bertram is president and CEO of Project Lead The Way and the author of the new book, “Dream Differently: Candid Advice for America's Students."

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