The Royal Swedish Academy of Sciences has awarded the 2010 Noblel Prize in Economic Sciences to Peter A. Diamond (MIT), Dale T. Mortensen (Northwestern), and Christopher A. Pissarides (London School of Economics) "for their analysis of markets with search frictions." But I wonder: should the Academy have given the award to ODesk, Elance, or Slovate?
Sure, the newly minted Nobel Laureates have a super cool theoretical framework for dealing with labor market search frictions. But do they have a real-world platform which is actually solving the problem in real-time?
In my humble opinion, labor force liquidity has already improved drastically since job sites such as Monster.com (MWW) and YahooJobs (YHOO) came on the scene. The newer wave of sites such as ODesk, Elance, and Solvate go one step further by refining the exchange to focus more heavily on detailed skill sets and highly targeted job descriptions. This advancement has drastically reduced search frictions for those aware of these new platforms. Once they go more mainstream (and are further refined), the endgame will be a near frictionless, highly liquid exchange on which job seekers and employees can match their bid-ask as simply as investors on global investment exchanges.
If the government is serious about removing major systemic inefficiencies in the labor market, call a meeting with the CTO's of the NYSE-Euronext (NYX), Nasdaq-OMX (NDAQ), and Chicago Mercantile Exchange (CME). These guys run some of the best and most mature exchanges in the world. Why not bring their technologies to the job market?
Every year we get more Nobel Laureates in Economics. But this is serious time. We need real-world solutions and real-world entrepreneurs to fix the global economy now.