Thursday, January 29, 2009

OPINION: The New Economy of Innovation, Communication and Transportation

Global experts are stressing that as the United States and global economies emerge from these trying financial times within the next 4 to 8 years, it will be entering into an entirely new economy altogether. The economy we have now is based primarily on 'profits and growth'. This has accounted for an outrageous portion of our economy to be built around financial markets, housing markets, and land use development. Sub-economies upon sub-economies upon countless of sub-economies have been built around these foundation economies to get us where we are today. These economies have provided our country and other portions of the world with unparalleled standards of living, technological inovations, and supporting revenue that has allowed governments to maintain vital infrastructure improvements.

The premise for these economic machinations have been around for centuries -- each generation adding more diversity to the global economic portfolio. There have been many game-changers throughout history that guided our global economies (for better, or worse) to where we are today: advent of gunpowder, the Mongol hordes, the industrial revolution, European discovery of the New World. Right now, we are at the end of an era, whose beginnings were marked by the Great Depression and World War II. Rather than look at these instances as beginnings, however, it would be more prudent to see these events as transitions in our economic landscapes.

If the period of financial crisis we are in right now does not represent one of those transitions, then it at least represents a significant mile-marker. As a newer world economy starts to take shape almost a decade from now, it will have shed some of its tendancies of the financial sector growth and profit speculation. Things such as Innovation, Communication, and to a smaller extent Transportation will be added to supplement our global economic portfolio.

Don't believe it? Let's put it into a little better perspective. The use of computers and the internet has represented a very significant mile-maker to the human experience. But so far, has mostly expanded to the extent that it has greatly bolstered our financial sector by the exponential growth of newer markets. The world still pretty much looks the same...yeah, we have quicker access to information, but we still keep talking about the "still undiscovered potential of the internet". This is because it is being held back in a sense that it can only grow so far as its ability to generate profits allow it to. There is evidence to this during the dot.com boom of the 90's. While we abviously have more content now, there isn't as diverse of uses as there was then. Before the dot.com boom burst, there were all sorts of cool free things: free computer phone calling, 24-hour neighborhood or urban surveillance systems, and tons of other cool things long forgotten.

Transportation is another example of stunted growth by our economy: we still drive cars with combustion engines. period. Not only that, but the vehicles still all use antiquated mostly analog devices such as foot pedals, turn key ignition, etc. Nothing has really changed much in the past 80 or so years since mass production started. We still use the exact same nasty polluting energy source that we drudge out of the ground to operate them. This is a far cry from the innovative human spirit that had children growing up back in the 1950's doodling pictures of flying cars in their school books.

The focus of the new economy will have a much greater emphasis on innovation, communication, and transportation than what is currently the situation which our economy's main proprierter's like financials, profits and land development growth. It is hard from many people's fiscally conservative views to accept that fact that without market driven profits, there could be much innovation. In all actuallity, there will be MORE innovation this way. Innovation is currently merely a by-product of a market driven economy. Look at where all of the major intellectual developments have come from over the past 60 years -- government funded university studies, NASA, the military, world wide internet infrastructure, subsidation of alternative fuels...the harnessing of nuclear energy and the creation of the atomic bomb were all done in a government laboratory.

First published in 1951, the novel The Foundation by Issac Asimov envisioned a future with limitless energy through the use of nucleics (items and energy sources that use advanced forms of nuclear power). Coal and Oil, however, are treated as commodities in our financial system, thus an integral part of our economy. These industries have put pressure on governments to limit research in this field for fear of a financial meltdown. Nuclear energy is the cleanest and most efficient form of energy on the planet, yet provides only 15% of the world's electricity. Only through government subsidised or direct action can nuclear power be helped to realize its full potential, because the markets have fail us.

10 to 20 years from now the world's economies will be a vastly different landscape. Communities that emerge as succeses, will be the ones that collectively invested in the areas of Innovation (sustainable energy will be a huge driver for this), Communication, and Transportation.

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