Intellectual investment and capital will drive productivity in the next century.
Light and brainpower will begin to replace physical, geological energy, such as oil and gas.
Telecommuting will replace physical commuting (as a percentage of income, transportation expenditures are half that of housing).
We will manufacture different widgets: robots instead of garments.
This model will be predicated on the following:
1. Ideas are infinite with a price of zero.
2. Physical resources are finite with a positive price.
3. The execution of ideas provides value added productivity, income, and warrants an associated price.
Therefore, individual and societal value is optimized when:
1. We share ideas and information.
2. Income is received when ideas are executed in a manner that adds value to the individual and society.
This model provides greater economic sustainability, since it continually incentivizes us to:
1. Innovate and create
2. Engage in entrepreneurial endeavors.
3. Increase the quantity of valuable products and services, such that price relative to income is affordable.
4. Increase the quantity of transactions (greater monetary velocity and economic multiplier with stable, low growth
5. Increase income and economic growth.
Current anecdotal evidence:
1. Tim Berners-Lee
He invented the World Wide Web (WWW) in 1989 by applying the hypertext transfer protocol (http) to the internet infrastructure. In 1994, while at MIT, he founded the World Wide Web Consortium (W3C) to oversee its development. All of this was done free of charge and shared with the world.
The result: Google, Facebook, LinkedIn, Twitter, AOL, Yahoo, etal. were formed.
These firms added value to the shared system, thereby generating a high return for each company and society.
2. Guido Von Rossum
He produced and developed the Python programming language for free. In 2005, he was hired by Google to develop and apply Python to their web-based code review methodology.
Fifty years ago, consumption represented only 45 percent of our total income. Today, that figure is close to 70 percent.
Economic growth is impeded when end consumption is this high. Stronger growth is realized when expenditures are directed toward productive investment endeavors.
This new economic paradigm will provide greater incentives to produce and invest, thereby reducing consumption.
The lost half century in America will be reversed as we go “back to the future.”
© 2015 Moneynews. All rights reserved.