I started the research for this blog by reading “Internet matters: The Net’s sweeping impact on growth, jobs and prosperity” by the McKinsey Global Institute. After it praises the creation and growth of the Internet, it attempts to quantify its effect upon the global economy. As for job creation, the study uses an analysis of the French economy where it was determined the Internet “destroyed” 500,000 jobs but created 1.2 million more for a net of 700,000 jobs. That sounds fantastic but it wasn’t what I was researching.
The economist of this morning’s premise is that the ecosystems of companies like GM, GE, Boeing and, even IBM, created far more jobs than companies like Google, Facebook and Apple. According to information reported in the New York Times, Apple employs 43,000 people in the US and its ecosystem influences the employment of another 700,000 people globally. This is very different from the General Motors and General Electric we knew in the last century. GM once had over 400,000 employees in the US and its ecosystem influence millions of other jobs globally. GE had hundreds of thousands of employees with an ecosystem nearing a million. As we move from a manufacturing to a skills based economy, we need fewer workers. While it is easy to measure worker productivity in manufacturing, it is more difficult in the information industry. Consider that prior to desktop publishing I needed an admin for typing memos and letters, graphic artist for presentations, an account for financial and business modeling, and external printing firms to create brochures. I can now do all of those things by myself. Not just in house at Broadvox, but by myself.
The Internet has influenced productivity and job creation in a similar fashion. We need fewer IT staff, can leverage the cloud for data storage, hosted applications and social media resulting in SMBs and some enterprises requiring fewer standalone data centers. Cloud services has change how we file to create a business, manage supply chains, market and sell products, innovate, invest and so much more.
The answer lies not in rebuilding America or the global economy on the back of manufacturing but instead requires us to look forward to find additional avenues and uses for the Internet to create the jobs needed to sustain a growing population.