New Formula Needed for Raising Living Standards

Posted by on July 04, 2006

Writing in Fortune (7.10.06), Geoffrey Colvin points out that Americans' pay is stagnating. Pay is no higher than it was at the end of 2003.

"The conventional resposne is to urge greater achievement in science and technology, long our economy's foundation... But a contrarian school argues that the whole debate is wrong -- that focusing on science and technology is fighting the last war. They hold that the very basis of value creation is shifting from the disciplines of logic and linear thinking to the intuitive, nonlinear processes of creativity and imagination," Colvin writes.

Dan Pink, author of "Whole New Mind," has effectively advanced this argument. He told Colvin that in massive economic shifts people are terrible at forecasting what's next. The conventional view 30 years ago was that an economy couldn't be based on services. "When we are cabined in the present, we suffer from a certain poverty of imagination. We massively underestimate human ingenuity and resilience."

The future, Pink told Colvin, will be filled with "industries we can't imagine and jobs which we lack the vocabulary to describe."

Colvin warns that American workers need a new formula for raising their living standard, and with wages stagnating, they need it fast.