Saturday, March 18, 2017

An Open Letter to Congress and the President

Much has been made of our last election. Everyone has thoughts on where we are now and where we will be in the future. A general sense of unease and unrest has captured our imaginations and angst. There are also those who seem to be eager to impose their will on others through any means. I have talked to those who are awaiting the day when the shackles of polite society will be removed and they will be able to take up arms against those who disagree with them. I have also talked to those who yearn for the new administration to be expelled by any means necessary. 

I now often lament how those who fought and died in the beginning would react to how their dream turned out. There does not seem to be a day nor an hour that passes when the next scandal breaks. It has been just over two months and it already feels like four score have passed since the swearing in of our new President. I think most hope for the best for the man who sits day after day in a room with no corners. I know I do. But I felt that way about every occupant of that room who preceded him.

Our Congress seems more divided than ever before and no one should be surprised Turn about is after all fair play. So I wonder with all of the hyperbolic speech making if we have been lost in the shuffle. If those who grace that ivory building can ever get back to a time when a difference of thought can be celebrated. I am concerned they have lost sight of a few things and maybe don't realize we as a nation are at the very cusp of a new beginning.

During FDR's time he had the great depression and the 1937 recession, then there was WWII. But just prior to that he understood that poverty and a lack of opportunity were the enemy of idle hands. Through Congress, they passed the "new deal and then the "second new deal" both policies aimed to put people back to work and reign in dangerous banking practices. When WWII began the President and Congress understood the only way to win the war was to enlist the captains of industry. To push them to support the war effort and to churn out tanks, ships, guns, bullets and mercantile goods. During WWII the United States came together like no other time in our history and made unprecedented advancements in manufacturing and supply chain logistics. 

After the war the United States enjoyed the "golden age" and saw 27 years of prosperity and job creation. Eisenhower continued in this vein by enacting the Federal Aid Highway Act of 1956. Thousands of men and women were able to devote their entire working lives to this project. The US enjoyed another 35 years of remarkable advancements in the construction of our roadways and bridges. 

But by the 1970's all of innovation and automation created since WWII saw our first real declines in job growth as manufacturing jobs began to transition to the emerging markets overseas and south of the border. By the 2000's manufacturing jobs had all but vanished, which created virtual ghost towns in the rust belt and New England states.

There was another problem. Starting in the late 80's a stronger emphasis was placed on college degrees in the white collar sector. Blue collar jobs began to see an influx of workers south of the border driving down wages in areas of construction and agriculture. The trades began to dip in qualified workers as high school graduates turned their backs on the jobs their fathers were doing.

It was during this time the age of the computer began to take hold. Generation X had a whole new world open up before them. Around 2000 IT and telecom jobs exploded and the need for computer savvy workers were in high demand. Pagers were all the rage in the 90's which gave way to the cell phones by 2000. Laptops also were introduced and would swiftly overtake desktops for the casual user. The difference between this revolution and the revolutions in the past was the speed with which innovation and automation happened. In the past decades would go by before emerging technologies would begin to overtake how things were done. But today that gap in time has been decreased by the same decades. An emerging technology today may see five to ten years before it is regulated to the back shelves in box stores.  

Not quite 20 years have passed since the dawn of the last revolution and yet here we are again faced with what the future holds for the next generation of workers. I suspect this next phase will be even shorter. But it is here now and the next wave of job growth and skill sets need to be developed if we are to be competitive in the world market. 

My hope is those who can enact polices have read this far and are wondering what the next big thing is to hit our economy and our future. If you're still reading hang tight because we are almost there. There are just a couple of things you need to know before we get to the big thing.

In 1994 Amazon was created. They began to sell books on-line and would later as we all know shape and create and then reshape and overhaul the e-commerce experience. Walmart does not command the volume or the customer base. Hell for that matter no one does. Amazon is probably the best example of two emerging markets that will define both how business is conducted in the future and the type of business we will see created. The first is B2B & B2C (Business to Business, Business to Consumer) and IoT (Internet of Things).

B2B and B2C go hand in hand so no I did not count wrong. In order to have the one you pretty much need to have the other. In the B2B businesses sell to each other in the virtual realm, products in large volume that will eventually go to the consumer. Car manufactures, computers, cell phones, boats, planes and any other product that requires parts and consumables they themselves don't create. In each case the sum of the parts sold in the e-commerce between the business world find their way into the world of B2C. 

In the B2C world, many entities will buy wholesale straight from the producer and then resell those same products to the consumer often times in direct competition with the producer. Don't believe me, well go to Amazon and search for a product and look at the number of sellers for the same product you will find. Keeping in mind the actual producer of said product is probably not on Amazon. 

Both the B2B and B2C have moved from the one off model to the ubiquitous. This model has become so popular and obvious to everyone that you can now find an all together different model that is emerging on Facebook. This model is the C2C (Consumer to Consumer) You no longer need to wait for a warm Saturday for the garage sales for those good deals or looking through the classified ads for a babysitter on a Friday night. Now you can garage sale all day long on Facebook and find your babysitter all at once.  Overtime keep your eyes out as this will become more and more popular in how everyday people find alternate revenue streams for their everyday needs. In the next decade, this form of service will begin to seriously undercut traditional business models because it is tax free and a lot cheaper than buying it from a traditional business.

Which leads me to IoT. This is the space where the real emergence has really yet to begin. Smart devices are all the rage now. From your phones to your homes and cars. The "App" and the convenience and service it brings to the consumer is what drives this market. It also dips its toes into other emerging services like the "Gig economy." What is it? Well, back in the day we called it temp services. Today you might recognize it as Uber or consulting. People who provide a specific service for a predetermined time frame. This space is where I think we can see a lot of growth and capital over the next several years.

Hang tough I'm almost there. 

Did you know that large conglomerates have around $1.4 trillion in offshore accounts? Much has been made about bringing jobs back to the US and a little bit of noise and kerfuffle about this money. I already told you about B2B, B2C, C2C, IoT, and Gig economy. If you're paying attention, then this won't come as a shock when I tell you this is the next revolution. But it is also how Congress can get that money repatriated to our shores.

Manufactured Services or Service Factories whose commodities will bring out the value of the widget or item purchased. Large scale manufacturing and assembly lines have become a part of our history, but will not be a part of our future. By that I mean people employed to take the sum of parts and produce something. Innovation and automation push out the need for physical intervention by humans. But people will still be needed to fix, repair and service those machines.

Here is another example of a manufactured service and a means of repatriating jobs lost overseas. Companies who have offshored call centers should be encouraged to train and hire the young and the old who have found the marketplace hostile. By using technology available today, these same corporations can save costs on those buildings and phone charges by hiring here in the US and eliminating the physical footprint overseas. By targeting those who find employment difficult to obtain like the home bound, retired, laid off and youth companies have right now a ready to work-force. This gives them two things a really good PR move and also providing opportunities to those in our communities are lost and struggle the most.

Here is another ready to go option. By telling those companies who have sought to hide their revenues from the tax man they can repatriate all $1.4 trillion by educating tomorrow's work force.

Here is how I would frame it. 

Companies across all industries know what the next technology is going to be and what skill sets will be needed. Four year and two year colleges will never be able to provide the level of training and support tomorrows workforce will need. But those in the thick of it are keenly aware of what training is needed for the workforce they have and the workforce they will need.

45% of repatriated money will go to the foundation of post secondary education in the form of training material, up to date technology and qualified trainers for students with an emphasis on emerging technology. In exchange the government will give tax incentives for investing in local and national infrastructure needs. Students will get to enjoy a post secondary skill training free of charge but will be required to participate in some form of community service for the duration they are in school.

The second part of this agreement is the hiring of American applicants ahead of H1 visa workers. With 100,000 issued every year to foreigners who are well paid by American companies. This is an obvious way to retake those jobs that have been farmed out to overseas interests. By investing in the education of American workers the government and companies drive down the unemployment rate and drive up the economy and GDP. It also keeps uncertainty out of the market and strengthens and emboldens the fabric of this nation to newer heights.

Lastly, if we stop demonizing the trades and make it known that these blue collar jobs both pay well and provide stability. Workers with these skill sets ensures a living wage is always available to them. We start by bringing these skills back into our high schools and Vo-techs. Like the white collar tech jobs, trade organizations investing in education and internships get continuous quality applicants to fill the expanding needs we have today and tomorrow.

Both of these measures will provide competitive and affordable access to education and the job market. It will also force the overly expensive four year colleges into competing with students who recognize they no longer need to pay tens of thousands of dollars for an education. This alone will effectively bankrupt the school loan practices of today. 

Regardless of your background, income bracket, education or political bent we all put family, friends and our homes above everything and everyone else. This is an extension of what we all hold dear. There is no reason why putting American interests first is a bad thing. The stronger we are at home means the stronger we are abroad.

The way to defeat some of the problems we have today is to de-incentivize the problems that plague our workforce and economy. By giving corporations a pathway to repatriate money and jobs without demonizing them and emboldened incentives to participate in our local economies, we as a people will no longer need to depend on government handouts. The nanny state dies under its own weight and people have the tools, structure and independence to succeed.