Friday, February 10, 2012
America is in decline. We've lost our way. We're no longer the leaders and innovators of the world. We've shipped all our jobs offshore.
Are you kidding me? Are you just not paying attention? Are you listening to the TV news? Apparently you haven't been in Chief Executive Boards International meetings lately. Ninety percent of our members are expecting 2012 to beat 2011 - some by a wide margin.
America is producing more manufactured output than ever before. Yes, it's doing it with fewer people. Almost everything (goods, as well as services) in America is increasing in output, with fewer hours of labor expended. We call that Productivity -- the units of output divided by the labor hours needed to produce it. I've heard, "all we're creating are hamburger-flipping jobs." Not true, but guess what? Even that industry is producing more hamburgers with fewer minutes of labor per burger.
I just watched the boarding of a 150-seat airplane managed by a single gate agent. Just a few years ago, there would have been 3 people involved in that process. Most passengers showed up with boarding passes they printed themselves - either at home or at self-service kiosks. They paid for their tickets without another human being even involved. Contrast that with 20 years ago -- you had your assistant call a travel agent, and set in motion a process that was probably personally touched by at least a dozen people, including the driver who hand-delivered the printed tickets. Is that a "highest and best use" of a human being??
So what's the "next big thing"?
Brian Wesbury, my personal favorite economist, says the next wave of economic growth and productivity improvement is a revolution of computing, moving off the desktop and into the airwaves. A 20-year long trend of accelerated productivity improvement is continuing, in large part fueled by Information Technology.
If you have a library of old company newsletters from the 70's and early 80's, you'll find countless articles exhorting employees to improve productivity. Despite all that print, productivity didn't move a lick. Companies fought for 1% and 2% productivity gains. Reason? Nobody had any new tools by which to do anything much better.
Late 80s -- personal computers. Control of computing resources moved from the high priests of the corporate computer room to the desktop of the branch and regional office. Early 90's -- the Internet. Suddenly the branch and regional offices could communicate and collaborate, whether Corporate liked it or not. And they started performing better. A lot better. Suddenly productivity started improving across all kinds of businesses by 4%, 6% and 8% per year. And so it has been for the first 20 years of the Internet era.
During the recent recession, productivity soared -- yes, on less output, but with even fewer labor hours.
This wave of innovation is not originating in China or India or Europe. It's originating in America, where it always has. In the Post-Japan world economy, Americans are the ones on the leading edge of applying Information Technology to deliver almost everything better, faster and cheaper. The rest of the world benefits, but largely follows, rather than leads.
So, whether you're making bets on investments or tooling for your company, look to the "cloud" and look to mobile devices. Look for ways to put more information tools in more hands in smaller packages. Tablets for the sales force. Tablets on the shop floor. Smart terminals on the belts of the warehouse staff. Smartphone apps tailored specifically to your business, your processes and your workflows. Look for ways to take elapsed time out of everything you do. Get the information on to the next process step, even before the material arrives.
Think about it.
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