Left Behind

Americans created the knowledge economy. So why can't they keep up with it anymore?

BAYARD, NE - JANUARY 25: A desk sits empty while June Brown (Rear-R), the teacher at the Hill Public School works with the students at a table January 25, 2005 near Bayard, Nebraska. The eight student, one room school house may have to close after nearly 100 years due to the fact that the school's accountant made tax errors on forms from 2000 to 2002 and now the school owes the IRS over $10,000 in fines and penalties. (Photo by Larry W. Smith/Getty Images)

America today is akin to the Ottoman Empire at the end of its days. Immensely important, commanding huge global influence, badly run under mounting debt, it is not the leader of the world, but the sick man of it.

At the root of America’s problems today is one that Americans themselves created: the knowledge economy. That economy and its associated technological advances, from outsourcing to Internet telephony, has displaced many Americans from work even as it has made firms like Apple among the world’s richest and most admired companies.

The three-year-old economic crisis has only accelerated that process, but in no way started it. As in Europe’s transition from an agrarian economy to an urban powerhouse during the Industrial Revolution, there will be many whose skill sets just won’t be needed in this new age.

But the likes of Amazon, Apple, Facebook, and Google put together cannot employ the people laid off by Ford and General Motors. According to the U.S. Bureau of Labor Statistics, the manufacturing industry’s employment numbers went from 17.6 million in 1998 to 13.4 million in 2008; they are projected to decrease to 12.2 million by 2018. The IT industry’s employment numbers are projected to grow to only 3.1 million by the same year. Designing more Facebook clones and iPad apps won’t close this gap.

And that’s at least in part because, for all the incredible quality of U.S. discourse, the American education system is in an abysmal state. Its universities are still the envy of the world, but the United States has a 30 percent high-school dropout rate and recently ranked 31st of 65 countries in math proficiency in a ranking compiled by the OECD. What will those people do? How will they live? No wonder America’s Ph.D. students, especially in science and engineering, come increasingly from overseas.

If the United States continues to look to the tech sector to lead it out of recession while maintaining unemployment close to 10 percent, it may well have nothing more than a feudal recovery, one in which those who have the immediate skills or the wealth to take part in it do so and those who don’t remain unemployed — a techno-aristocracy of sorts.

I recently asked an American businessman what many unemployed Americans will do if they can’t find new jobs comparable to their old ones. "Go back to farming," he said. And it didn’t entirely sound like a joke.

Mishaal Al Gergawi is the co-director of emerge85, an emerging markets lab based in Abu Dhabi and Washington, D.C. He tweets at @algergawi.

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