Back in March, I wrote a column arguing that smartphones, tablet computers, Internet TVs and other personal technologies are delivering an unexpected bonus. Rather than depreciating, the way most equipment does, these gadgets actually get more valuable over time thanks to the hundreds of new apps that debut every week, plus free upgrades for existing apps. I argued that even though this kind of value isn't captured in traditional economic measures like the gross domestic product (GDP), it definitely increases our gross satisfaction -- and that we ought to be more thankful for these kinds of improvements, even as we struggle to see signs of real gains in other parts of the economy.
Today I want to look at the flip side of this phenomenon and explore some of its more troubling implications, especially for employment and economic growth. I think there's room for optimism about the long-term economic future, but it's important to acknowledge that in the short term, better gadgets and better software aren't doing much to help the average consumer get or keep a job.
There's a fancy word for the technological trend I was writing about in March: ephemeralization. Buckminster Fuller coined the term back in the 1930s to describe the general concept of "doing more with less" by building more human understanding into our machines and factories. Fuller had process innovations like Henry Ford's assembly lines in mind; he wasn't thinking about software, which didn't really exist yet. But the idea still applies to devices like the Apple
This kind of consolidation is exactly what Fuller was talking about when he predicted in his 1938 book Nine Chains to the Moon that you'll be able to do "more and more with less and less until eventually you can do everything with nothing." The remarkable thing is that we're only a few years into the era of the iPad and the iPhone (which is basically a mini-tablet) -- which means we're likely to see even more of the information-related tasks we carry out every day subsumed by apps. "The reason tablets are going to take over the world," Y Combinator founder Paul Graham wrote in this December 2010 essay, "is not (just) that Steve Jobs and Co. are industrial design wizards, but because they have this force behind them. The iPhone and the iPad have effectively drilled a hole that will allow ephemeralization to flow into a lot of new areas."
Even business IT is bending to the force of ephemeralization. Last week I talked with Adam Wiggins, one of the founders of Heroku, a Web application hosting company incubated by Y Combinator and now owned by Salesforce. You could argue that Wiggins's whole business is about ephemeralization (he says exactly that in this April blog post). The company takes the burden of Web server setup and maintenance away from software developers, so that they can focus on writing great code, in a language -- Ruby on Rails -- designed specifically to save them from having to reinvent common business functions with every new app. Not so long ago, Wiggins notes, deploying business software meant physically walking into a data center to wire up servers. Today Heroku is "ephemeralizing IT to the point that I've seen tweets from people who have deployed their apps from Wi-Fi on an airplane."
Now, while the benefits of ephemeralization for the end users of technology are obvious and powerful, there are some downsides. And here's the big one: Ephemeralization may be a net destroyer of jobs. Heroku has about 45 employees servicing its thousands of customers; balance that against the hordes of consultants, sysadmins, and other support staff every enterprise once needed to keep its IT systems afloat. The music industry is another classic example. The rise of the digital download has been a huge boon for music fans -- but it's been a sadder song for thousands of former employees of Tower Records, HMV, Virgin Megastores, and struggling record labels. Press operators, copy machine repairmen, truck drivers, travel agents, and bank tellers haven't fared too well in the digital revolution, either.
So, are you putting somebody at a laptop, TV, or camera factory out of work every time you fire up your iPad? Maybe not -- but the job displacement resulting from ephemeralization may help to account for the fact that median wages have stagnated over the last few decades. And for all its vaunted technological prowess, the United States hasn't outpaced the rest of the world in GDP growth (our growth rates pretty much track with the global averages since 1972).
Tyler Cowen, an economist at George Mason University, argues in The Great Stagnation -- an Amazon Single e-book, ironically enough -- that the big growth-generating technological transformations (think electrification, automobiles and highways, and air transportation) ended decades ago. Today's revolution is about the Internet, and the Internet, while amazing, can't by itself drive economic growth at the pace we've grown to expect. "The new low-hanging fruit is in our minds and in our laptops and not such much in the revenue-generating sector of the economy," Cowen argues. "Innovation hasn't ceased, but it has taken new forms and it has come in areas we did not predict very well."
So far, I've been spelling out the reasons for pessimism about technology's prospects for reinvigorating the economy. Are there also reasons for optimism? I think so. Here are a few.
1. There may be new information-technology-driven revolutions waiting around the corner. Critics of Cowen, such as MIT management professor Erik Brynjolfsson, who runs the Sloan School's Center for Digital Business, say that plenty of revenue-generating fruit is about to ripen in burgeoning fields such as home robotics. "The next mind-blowing thing, on the same level as the Web or email, is robots," agrees futurist Paul Saffo, who spoke last night at a Churchill Club event in Silicon Valley. "Somewhere out there, the next Steve Jobs is working on this." If Brynjolfsson and Saffo are right, somebody's going to have to build, program, and repair all those robots -- and while those jobs may only be open to highly skilled workers, a true consumer boom in robotics would also generate lots of jobs in areas like parts, accessories, transportation and logistics, and sales and marketing.
2. Ephemeralization itself might eventually give rise to new types of jobs. The more apps we have on our smartphones and tablets, after all, the more demand there will be for fresh content. That could mean anything from YouTube videos to weather reports to new levels of Angry Birds -- creating work for tomorrow's vloggers, meteorologists, and game designers. And I can imagine whole new specialties arising to service the networked-app economy, such as the "information hospitalist" -- the iPad-toting health care worker whose job is to work with patients, nurses, doctors, pharmacies, labs, and insurance companies and make sure the data arteries linking them stay unclogged.
3. The fact that so many old jobs have dried up means there's a huge pool of workers available for the new industries needed to combat our one truly existential problem: climate change. You know those disaster movies where there's an asteroid headed for Earth and the government launches a secret trillion-dollar project to intercept it and/or build underground shelters? Climate change is like the asteroid, but in slow motion, and it's going to take a wartime-scale mobilization of people and technologies to blunt it. Not only do we have to figure out how to power our civilization without emitting carbon dioxide, methane, and other pollutants into the atmosphere, but we must find ways to suck the current excess of greenhouse gases back out of it. In short, "We need an historic commitment to put people to work building the infrastructure and technology base for a massive and speedy shift away from coal, oil, and gas to renewable forms of energy." That's Al Gore speaking, in his 2010 book Our Choice -- which, by the way, has been turned into a fantastic iPad app. Did you hear that put people to work part?
4. If all else fails and the "new normal" of high joblessness turns out to be truly permanent, then there's still a glass-half-full way of looking at the situation. A slower-growing economy is probably more sustainable, not just environmentally but economically. On the environmental side, slower economic growth means less energy consumption, which means less carbon gets dumped into the atmosphere. It might also hold back population growth, meaning we'd need less of everything; E.F. Schumacher would be pleased. (He's the economist who wrote the influential 1973 book Small Is Beautiful, which criticized rampant consumerism and introduced the concept of sustainable development.) On the economic side, slower growth could force Washington, D.C., out of its current state of theological gridlock. So far, the government has kept borrowing, and the bond markets have kept loaning it money, on the assumption that we'll be able to pay it all back when high growth rates return. If it becomes clear that this is unlikely, political leaders will be forced to agree on measures to restore some budget sanity, which would in turn reassure global markets about U.S. economic stability.
So there you have it: Four slender threads on which to hang some hope that one of the biggest trends in information technology -- ephemeralization -- is good for our pocketbooks, and not just for our brains.
More from Xconomy.com:
- The iPad May Kill the Kindle, But Amazon Could Still Come Out Ahead: The Only Comparison You Need to Read
- The Apple iPad: Three Unanswered Questions
- iStocking Stuffers: The Best Apps for That iPad Under the Tree
Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can email him at email@example.com or follow him on Twitter at twitter.com/wroush. You can subscribe to his Google Group and you can follow all Xconomy San Francisco stories at twitter.com/xconomysf.
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