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The Next Economy and the 'Next Politics'

The Obama administration's efforts to enhance manufacturing jobs, while very much needed, seem focused on a 20th century model of large-scale, "heavy" industry.
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To understand how the next economy differs from the one we have known, consider just one statistic: analysts following small businesses see the number of "contingent" workers -- the self-employed, free-lancers, or "accidental entrepreneurs" laid off from full-time positions -- growing to 40 to 45 percent of the workforce by 2020 and becoming a majority by 2030. That trend represents an enormous change in how people will live and work, in how businesses will operate, and in what services and support we will need from government. And apart from leaders like former Secretary of Labor, Robert Reich, who has written insightfully about this, much of the political discussion in this country seems oblivious to this tectonic shift in our economy.

The Obama administration's efforts to enhance manufacturing jobs, while very much needed, seem focused on a 20th century model of large-scale, "heavy" industry. In the next economy, "manufacturing" may more-often occur at a micro scale, with free-lancers 3D printing in their back bedroom or the self-employed laser-cutting products in their garage. Meanwhile, Republicans call for incentives to spur job growth, also an important goal, but their protection of the super-rich and their dismissal of "ObamaCare" (The Patient Protection and Affordable Care Act) completely misreads the next economy. Self-employed entrepreneurs rely upon durable, high-bandwidth infrastructure in order to communicate with and ship to customers globally. They need affordable health care equivalent to what large companies provide their employees. And they tend to congregate in places with a high quality of life, where other entrepreneurs go.

This demands not only a greater amount of public investment than the Republicans seem to want, but also a different kind of public investment than what at least some Democrats seem to have in mind. So much of the infrastructure discussion in both parties, for instance, seems to extrapolate trends from the last century, based on the old economy of people commuting to work 9 to 5. In the next economy, those commuting patterns may largely disappear and we may find ourselves with too much highway capacity and bigger bridges than we need. At the same time, we may need a much more robust data infrastructure and a much more resilient electrical grid, powered by as many different sources as possible to ensure its reliability.

With the rise of the contingent workforce, people will also live and work in ways we haven't seen for a very long time. We have developed our cities based on the old economy, with residential, commercial, and industrial areas kept separate and "pure" through single-use zoning. That made sense in an economy that divided our work lives from our private lives, and that spawned large-scale noxious industries that no one wanted nearby. The next economy, though, may look more like the way in which people lived and worked prior to the industrial revolution, in which home, office, and shop co-exist in some combination of physical and digital space. This may require rethinking our zoning laws to allow for a much finer-grain mix of uses and repurposing buildings designed for single functions that will have no tenants or buyers if they remain that way.

We can already see the impact of the next economy in our retail sector, with iTunes forcing the closing of many record stores and Amazon prompting the bankruptcy of many bookstores. And that trend of digital commerce replacing activities that once occurred in bricks-and-mortar will likely continue in almost every facet of the economy. This does not mean that we won't need buildings anymore, but it does suggest that we will increasingly use buildings for what we can't get any other way, such as face-to-face conversation in the company of others. Indeed some activities, like coffee shops, may become even larger and more pervasive, as the consuming of beverage becomes more of an excuse for the self-employed to get out of their home office to be with and work among others.

While the number of people sitting for hours in the nearest Starbucks shows how much the next economy has already arrived, we seem very unprepared for it. That is true not only in policy debates in Washington, which often sound so 20th Century and largely clueless about the next economy. It is also true in our educational system, whose focus on the conveying of information and the giving of tests remains geared toward preparing graduates for an industrial or bureaucratic work world rapidly disappearing. The next economy doesn't demand employees who repeat facts and follow orders, but just the opposite: creative, entrepreneurial individuals able to see an unmet need and to provide a product or service that addresses that market, whether it exists locally or across the globe.

This post-industrial, post-Guttenberg world is not a new idea. But the growing fluidity of the global economy, the dramatic disruptions of the digital revolution, and the radical empowerment of individuals through mobile computing and micro-manufacturing have all made that idea a reality for an increasing percentage of the workforce. If this new economy is to thrive, we need the same degree of flexibility, adaptability, and creativity among those in power on both sides of the aisle. The next economy, in other words, needs the "next politics," sorely missing at the moment.

Thomas Fisher is Dean of the College of Design at the University of Minnesota.

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