American millennials are among the most schooled in the world but yet have a marketable skills gap which is becoming more obvious and would have to be addresses. Issues such as recent college graduates who can’t find commensurate jobs to pay off mountains of college debt and the attraction to the populist movements of Bernie Sanders and Donald Trump garnered have brought this issue to light. In this conversation, the key word is “marketable”.
Many reasons abound as to why this sorry state exist. Reasons from the general (though it varies from place to place and region to region) mediocre state of American public education to students majoring in degrees which have little demand and low pay could be listed. But as much as its easy to list all these reasons and magically expect sweeping changes overnight, such does not have to be so. More than any generations in history, millennials have the ability to easily gain new skills.
In the hands and pockets of many millennials we carry ubiquitous smartphones which mirror our lives and with which we can do without because so much information is stored in these deceives and are lives are virtually built around them. But also, these devices are virtually a gate way to the troves of the accumulated centuries worth of human knowledge. At out finger prints, we can easy research different topics. At our finger prints, we can have 1000+ page text books and grand treatise which in previous periods were a hassle to obtain and could only be gotten through isolated distributors who distributed them through the mail. Or even better, we have could easy take course in coding and other IT skills which could give people the freedom to freelance.
But despite this access to so much information and the ability to begin acquiring new skills, many millennials don’t seem as nimble and flexible as other generations which have a tiny fraction of such but did a lot with that they had. The question which should be asked is: why this state of affairs?
Before I launching iTruck, during the stage when I made people aware that a startup was in the works, it drew different kinds of reactions from people. Some saw it as amazing and were happy for me that I was pursuing my dreams and actualizing an idea while others reacted to it with mixed reactions at best and saw it such as a hassle. For those who saw it as a hassle, they might not have said it exactly, but to them I was being a fool because I am an engineer with a solid degree who could easily get a good paying job and could live a very comfortable life with all the amenities and pleasures of middle class America. But in many ways they miss something fundamental.
In order to get a job which pays a very good salary and gives one a comfortable life, those jobs have to exist in the first place. For those jobs to exist, someone or a group of people somewhere have to create those jobs. For those jobs to be created they have to go through the hassle of taking a risk; investing their time, energy, imagination, and financial resources towards a venture in which success is not 100% guaranteed. On no matter what scale jobs are – whether it is a large fortune 500 company which could have hundreds or thousands of job openings or a small to medium size business restricted to a town or a small geographical area which could have between less than a dozen to dozens of job opens at once – this fact is fundamentally not different.
People should realize that for all jobs they have which bring in an income which keeps them afloat and maintains body and soul, someone somewhere has to first create the job. For those who say they want to launch some idea which might sound crazy to some people, they should be encouraged because entrepreneurship is definitely not for everyone and they a carrying our a very socially desirable function.
When growing up, I was heavily discouraged in engaging any any thing that smirks of a game of luck. Thus, I probably can count the amount of times that I have participated in a raffle or bought lottery tickets. My parents believe -both on moral and practical grounds-that such locked people into thinking things came about through luck and not through any effort and many got addicted to participating in such games.
Upon growing up and thinking through things more and how people succeed and fail in what they do. I have come to realize that its purposeful action which determined such and people trying to substitute a position of more ease for a place of less ease. To many, saying that results seen in peoples lives are a result of their decisions and actions might be controversial. But no matter how its thought through, this is the reality. For example, a 100 meter track and field champion probably made a lot of sacrifices in their social life and abstained from certain foods and only consumed on certain ones in definite portions at definite times.
An alarming trend is winners of lotteries going back to the same position they were when they participated in such. Many splurge their money on expensive articles and give money to everyone who comes by begging for a cut. This phenomenon can be understood through the fact that they never internalized the cost of what it took to get such new and sudden heights of wealth. For example, someone who worked 100 hours a week while almost broke for many years and has a net worth of $20 million values that amount more than someone who got it through the gas station lottery. The first person understands the cost in terms of social life, family life, leisure time, and even health during the years of struggle. Thus, they value what they have highly and would do everything to maintain its value and guard against opulent spending. On the other hand, the person who participated in the gas station lottery does not have such experiences and did not really give up anything to get such.
Even though all actions aimed at some result of easing some state of unease don’t always work and in many cases require a lot of iterations along the way, success is always the result of purposeful action. Success is rarely through luck. Even in the instances in which luck might befall someone along the way, they already were purposefully aiming at some state more ease. Thus, if you want to succeed, it takes a lot of hard work and purposeful action!
Sometime in the early to mid 2000’s, during a trip to Nigeria, I happened to be in with my parents when they were visited an academic. At some point, the conversation was about the internet and globalization. The academic said something to the effect of those for unfettered globalization want a situation in which anyone (including kids) can just log into the internet and retrieve information on anything; including how to assemble nuclear weapons. Obviously, no one wants a situation in which people have access to such information for obvious reasons. But such an extreme example, was being used to get at wider concept which I intimidatingly understood. Years later, through education and years of thinking through how the world works, I have come to conclude that such sentiments are very unfortunate.
Every once in a while, I see stories online of Africans who build technical gadgets; the frequency seems to be increasing. Example I have seen include wind turbines, electric/solar-powered cars, and remote control airplanes. In many cases the people who come up with such have no education beyond high school. When asked how many learnt such and sourced for material, they say they learnt such online and looked through scrap material for parts. What even makes these stories more remarkable, is that they live in societies people might dismiss as not placing an emphasis on technology or ones in which parts to build such devices can easily be sources for.
Back to the story I was talking about. With the mindset which I outlined in the first paragraph, the individuals who came up with all these gadgets will probably have no access to the knowledge they used. In a society in which people have no access to the latest cutting edge in the world, such societies are societies in which its members are unable to achieve their full potential and societal stagnation sets in. If one looks through history, this process by which people can go online and learn new things and know what their peers around the world are doing is nothing new. If anything, information technology and the internet has increased the speed at which this happens and made the disruption which it causes more swift. But even with any disruption it might cause in the short run, the long term gains in most circumstances outweigh the short term problems it might cause.
Something I would love to see is people with resources taking up such talent and giving them the ability to refine their craft. What a great thing it would be if products and industries can be developed by this talent. Such is the power of the internet which in the first place exposed such talent to great bodies of knowledge before it informed the world that such potential and talent exist.
In an era in which the term “globalization” is used loosely and many people (i.e. not politicians or academics etc) openly say they are against globalization without really grasping the implications of what they are saying, this is how globalization is meant to work. Its not meant to have middle men or institutions who rig it to wanted outcomes and turn it into a zero sum game in which in some cases the gains of some come at the cost of others. Globalization correctly understood is meant to be a system under which citizens in different areas of world interact peacefully (e.g. through the exchange of knowledge, trading, and travelling) with each other on their own terms. and make each other better off in the process.
Earlier this year, I bumped into a former colleague. We obviously talked for a while and came up to speed with what we all were up to in life. Somewhere in the conversation, I was asked if I still was trying to begin a startup. I answered to the affirmative and said the startup was up and running and in its infancy. I then requested the person to give me their phone on which I promptly took the person to the website of iTruck (www.goitruck.com). The persons response was one of surprise in which the person told me that they never expected that I would follow through and dismissed it as all talk. I almost gave a cocky response along the lines of: “Wrong person! When I begin something I never stop till its done”. But I let go and was understanding about such sentiments.
That episode showed me that many people are all talk and can talk about the most grandiose ideas with the most eloquence but very few actually follow through. In the case of the person with whom I was interacting, the person had probably seen many people who were great at talking but never followed through with their ideas. Many people might not follow through for many reasons which include discouragement by people who dismiss their ideas, lack of knowledge or expertise on how to bring their ideas to life, or even being risk averse.
In my case, when iTruck was still an idea on paper I never knew how to bring my ideas to life. But by putting myself and idea out and asking people who knew better than me for helping and also through some luck, things began to fall in place. Along the way, I came to discover that beginning a startup is not as hard as many think and is actually within the reach of many people. Even as things stand right now, I would not say I know it all or things are easy but I keep myself open to learning new things everyday and asking for help when needed.
If you have an idea which you want to implement, just begin. Never wait till “the conditions are right” or you have “the expertise”. Success is definitely not assured. But through acting, many things will fall into place and gaps in your knowledge will be filled up along the way. Through the act of just beginning and talking less, an idea is already 50% implemented.
In the past few years, the world has been abuzz with talk about how a jobless dystopia is around the corner in which the rate at which robots displace jobs humans currently perform will be difficult to keep up with. In many ways such scares are not new and are part of the fallacy of automation which has been around since at least the dawn of the Industrial Revolution. As with different times in history in which this scare was prevalent, many otherwise highly intelligent and assumably informed people have bought into this. Among them is Bill Gates who in many ways became wealthy by displacing jobs and increasingly efficiency worldwide through the proliferation of the personal computer (think about how Microsoft Words has displaced hundreds of thousands, if not millions of typist and calligraphers around the world) for both personal and business use. As a solution to this, Bill Gates proposes a tax on robots because the tax revenue which robots will assumably deny governments in the future.
In previous post and in different forums, I have gone to lengths to talk about how mainstream economics does not have a capital theory and does not place emphasis on the role of capital accumulation in economic growth and development. I have further discussed that throughout history, contrary to intuition, in the long run, many industries with successively increasing levels of automation tend to employ even more people in the long run (e.g. auto industry). Thus with the assumption that even more jobs will exist in the future due to automation and how they aid in expanding some industries, the argument of a declining tax base is logically moot.
Regardless of ones views are on tax policy and the effects of different levels of taxation, many tend to agree that the more a service or product is taxed, the less of the service or product will exist. Examples include sin taxes (e.g. alcohol and tobacco) while other historical examples include the window tax in England. Thus, with a robot tax, isn’t it safe to say fewer robots would exist and this would hamper industrial efficiency and production which would have ripple effects through the economy?
The current craze of a jobless dystopia being around the corner which is sweeping the world which has many assumably highly informed people buying into shows that many people who society look up to as icons are not perfect and no err in their judgement and opinions. If history is to be our guide, the current craze will subside eventually and as years pass by we will realize that even though some industries might have been disrupted or died out, in the long run humanity will be better off and we will still have as many jobs around – if not more.
In the past few years, attention in the United States has been garnered towards so-called income inequality. Some see it as an issue while others don’t. For those who see it as an issue, theories abound as to why a wealth gap exist in society. But in all, everyone to some degree accepts that differences in consumption and investment patterns exist between the wealthy and non-wealthy and is a driver behind this gap.
In examining the causes of this wealth gap, attention has been drawn to the stock market and its role in creating wealth for the affluent and wealthy and how many middle and lower income Americas don’t participate in it. As proof of this, for the likes of Bill Gates, Jeff Bezos, and Warren Buffet at the very top of the wealth pyramid, a massive portion of their wealth derives from all their stock holdings. The stock market is why within a few weeks for a person like Jeff Bezzos, his wealth could increase by a few billion dollars. Even though this analysis of stock market investment is right, it misses a very key and fundamental point. The key point is that the true determinant of long term wealth of individuals is the value which they offer society and the skills which they have.
In many ways, investing in the stock market inherently involves a lot of risk and uncertainty. No guarantees exist that capital invested with reap returns or even be recovered. Periods exist in which the stock market reaches new and dizzying heights (like the stock market today) while periods exist in which the stock market goes through massive corrections in which billions, if not trillions, of dollars in wealth disappears. During periods of massive market corrections, savings of millions of modest income people trying to accumulate some modest wealth for retirement or children and family are lost and many are permanently damaged during these periods. Those who come out of such without feeling likes their lives are over are those whose true wealth derives from their skills and the value they offer society. For the likes of Bezzos and Gates, even though the increases in their wealth in the past few years derives from the stock market bubbles, whenever the stock market corrects itself and their wealth is reduced, they would not be hit in the long run or have feelings of everything they have worked for being gone because of the value they would continue to offer society in the years and decades to come.
Obvious, not everyone is going to be a Gates or Bezos and offer the kind of value they offer to billions both in this country and abroad. But in some way or another, everyone can take steps to increase the value they offer to others and the skills they have. Many assume they have to go through the traditional educational route to be of value in society. But today, this is increasingly no so. Ways of being of value to others include looking out for pressing business needs with very low barriers of entry in a community ones lives in and offering a superior service at a prices which everyone can afford. Other avenues include learning how to code very proficiently and designing websites and software for others. In debates on the wealth gap an issue which is seldom promoted is financial education and decision making and its connection to the wealth gap in society. This a key area which is lacking among many Americans which needs to be addressed.
Recently, I was listening to a podcast in which an economics professor was being interviewed about entrepreneurship and the role entrepreneurship theory within mainstream economics (its an aspect currently disregarded by the mainstream). Along the way he made an analogy which has been on my mind for a while. He compared the argument for startup incubators on college campuses to the infant industry argument. While the argument and the grounds on which he ultimately dismissed the idea of startup incubators are in general sound, he in my opinion missed a very suttle point.
The infant industry argument goes something like this: due to the efficiency of foreign industries (e.g. steel), a protective tariff should be erected to protect against international competition. Time should be given for domestic industries to get on par with the international competitors after which the tariff would be lifted. This setup simply amounts to a subsidy by tax payers of some industry and the allocation of factors of production along lines which are less efficient than would have been obtained in a competitive environment totally dictated by consumer preferences. Thus consumers pay more for goods and services and the whole productive apparatus of the economy is distorted.
Though incubators are meant in many ways to help startups through their infancy, this process is totally voluntary. No one is forced to give up their resources to sustain startups which have a lot of uncertainty which becloud them and their chances of failure are high. Most incubators are funded by venture capital funds or even the voluntary donations of people who want to see a thriving tech community in their area. But in the case of a protective tariff, consumers and producers alike don’t really have a say, their choices are overridden, and they have almost no say in their subsidy towards infant industries. For example, if I am a third world welder, my goal would be to buy cheapest steel possible. Under competitive conditions, if Asian steel does the job of keeping my cost down, I would buy Asian steel. But if a protective tariff exist, I have no choice but to buy more expensive domestic steel which drives up my cost and reduces my profits and ability to reinvest and expand my business.
Startup incubators provide a decisive service which goes beyond incubating startups. Due to incubators usually being at a central location, its easy for all tech talent in town to congregate at one location and exchange ideas and help each other. For example, if I am looking for someone to help in coding in a certain language, I know where to go and look for help. For this one reason, dismissing incubators would be a big mistake.