The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [76]
Like any new “general purpose technology,” or in other words a technology with a wide range of applications, ICTs are reshaping the economy. Elsewhere, I’ve described this phenomenon as “weightlessness.”17 This is because advanced economies are shifting significantly toward the creation of value that is intangible, either in the form of services, or in the form of the innovations, design, creativity, or customization embedded in physical goods. The UK and U.S. economies literally did not increase in physical mass in the 1990s and 2000s, although GDP in each case grew significantly during those twenty years.18 However, the structural shift in the advanced economies is taking place over decades, as businesses and households and governments slowly adapt. Part of that process of adjustment involves the development of ever-increasing levels of trust inside these different economic institutions and between individuals. As I’ll go on to explain, trust is more necessary than ever in an increasingly weightless economy.
Why are the new technologies making more central than ever the role of trust or social capital in the economy? To understand the reasons, let’s look at three different types of economic change being driven by ICTs. They are the reorganization of businesses, the process of globalization, and the changing importance of key cities in the global economy.
TECHNOLOGY AND PRODUCTIVITY IN THE FIRM
Let’s start with the impact of ICTs inside an individual business. Firms only enjoy the productivity benefits of investments in the technologies once they have reorganized and changed the way employees work. Recent research at the level of individual firms suggests that investment in ICTs needs to be accompanied by significant changes in structure.19 The use of the technology improves productivity only when companies at the same time invest effort in changing people’s jobs, the flow of work, and the structure of the company. More jobs in the leading economies require people to use their initiative, to be adaptable, and able to think. People need more qualifications and are not as likely as in the past to get through their working life without changing what they do. This is the familiar process of deindustrialization. There are still plenty of “unskilled” jobs; after all, cleaners and laborers are still needed. But a growing proportion of jobs require more than basic skills—the middling sorts of job that were suited to people who did not go into tertiary education, and were based on the kind of skills acquired through repetition, have been shrinking in number. So, for instance, the use of ICTs and automation of banks’ back offices have cut the number of bank tellers needed. Fewer managers have secretaries; those that still do will have a highly qualified PA rather than a typist to take dictation.20 And so on.
This pattern should not be surprising. Cheap information is unlikely to be useful to a business if members of staff are not allowed to use it to improve service or output. Nor will it increase productivity unless they have the capacity to use it well, which is likely now to require a bit of thought and initiative. So employees are likely to need a higher level of education than in the past; their employers will need to trust them to take decisions for themselves, and also to be doing their best for the business. It’s very hard, after all, to monitor how well an individual is doing in each separate and unsupervised business decision or engagement with a customer. The relationship between senior managers and frontline staff has to depend much more than