For decades now, many have argued that the future of the US economy is about replacing manufacturing with information and communication technology. Technology innovation thought leaders have argued that the free internet makes it possible for innovation to come from the bottom-up, instead of top-down from big corporations. And by making technology development open, anyone can contribute to making it better. The theory is that by removing the friction of money and "ownership" from the creative process, the end result will be faster, better. This "democratic" innovation process is evangelized by Steven B. Johnson in his recent book Where Good Ideas Come From: The Natural History of Innovation.
In new calculations for the Financial Times, Eswar Prasad, a former International Monetary Fund official now at the Brookings Institution and Cornell University, finds that the rich economies will owe a rapidly rising share of public debt worldwide, while contributing relatively less to global growth.
Rich countries already experiencing heavy demographic pressures on their public finances, such as Japan, will be joined by others, such as the US, which is beginning to experience the full force of the postwar "baby boomer" generation retiring.
Professor Prasad finds rich countries will see the average government debt per person of working age rise from $31,700 in 2007 to $68,500 in 2015.
To both replace manufacturing and grow the economy with information and communication technology, we need a creative process that yields something worth paying for. That creative process needs to start with an objective to serve a benefit customers will pay for, not What Technology Wants, as argues Wired founder Kevin Kelly in his new book.
What do customers want to pay for? They pay to share live, interactive learning and entertainment among complete strangers with a common interest. They pay hundreds to attend a live sports event or concert for a few hours. They pay thousands to attend a course in an institution of higher learning or a professional conference. They pay only pennies per minute for access to the cable and the internet, where, at a recent "Future of Media" conference, everyone agreed 95% of all content is junk.
The challenge facing technology thought leaders is the same one facing leaders of big corporations. How ironic that both are so disconnected from what customers want to pay for, at a time when communication is so possible.
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