Tag Archives: capitalism

The second economy – McKinsey Quarterly – Strategy – Growth

The second economy – McKinsey Quarterly – Strategy – Growth.

Here is a thought provoking article on the emergence of a digital economy to support the physical one of goods and services produced and delivered all around the globe. Unfortunately, this second economy does not supplement the existing physical one, it cannibalizes it by automating the manual tasks and activities previously taken care of by human beings. Net net, this new economy kills more jobs than it creates exacerbating the unemployment problem globally. Looking one step further, the real question becomes: when all workers of the physical economy will have lost their job because their tasks have been automated, will there still be enough consumers on the planet to sustain and support not only the physical economy but also the digital one? As a matter of fact, the digital economy is worth almost nothing if there is no need any longer to move goods and services around because their consumers have vanished at the same time they lost their income.

All economic transformations so far have resulted in a net compression of the total number of job opportunities. How much longer can we sustain such a trend before the system as a whole breaks apart? First, we moved jobs from the country side (farming) to manufacturing plants (industrial age), then we moved job overseas (labor arbitrage: off-shore, near-shore, right-shore… etc) to focus on a services economy. Now that services will no longer be delivered by human beings but by computer grids instead (services “commoditization”), how will we earn our living in the future? What will come next? We may actually see a resurgence of Proximity services or Community services because these are “High-touch” and “trust-based”, hence still very difficult (at this point in time at least) to delegate to a machine.

“Progress” in its largest sense is expected to benefit mankind. Funnily enough, we very often struggle to keep up with it and accommodate it in our daily lives. Finally can Progress be truly Progress if we are always running behind it?!?!?

The Old Capitalism is dead. Long life to the New Capitalism !

We are all used to all kind of activists in favor of replacing the current system, whatever it is: economical, political… whatever.

However, when a renowned organization like Harvard Business Review (HBR) invites someone to talk about reinventing Capitalism. This may be an early sign that a wave of change may be coming and it may be bigger than we currently think.

No matter what happens next, well, it is not harmful to dream of a better tomorrow 😉