Jobs, jobs, jobs

By Jeffrey Jones

At a recent breakfast meeting I heard an apocryphal story about Thomas Friedman who is publishing a new book on the state of global economy. The story goes that in preparation for his new book he reread his bestseller “The World is Flat,” which was first published in 2005 and last updated in 2007, just five years ago. As he reread his book, he was struck by the absence of the words Facebook, Twitter, Skype, etc. Five years ago he points out the term twitter was a sound, the cloud was where rain came from and skype was a typographical error. What are now household names did not exist in our vocabulary five years ago.

This kind of mind boggling change has been fun, but it has had broad and serious implications. We are better entertained and more socially connected than ever before, but this has not necessarily resulted in happier societies. Rather, we see a striking increase in anxiety.

Facebook, twitter and similar social media sites have become the triggers of social revolution. The world watched in awe this past year as government after government fell facilitated by social media sending us the message that a tweet can be more powerful than a cannon.

We clearly enjoy the new connectivity, increasingly available entertainment and the new productivity. Information technology has also created massive wealth so one would think that societies should project greater happiness. This revolutionary change, however, has resulted in an alarming increase in social anxiety caused primarily by the loss of jobs and a more visible gap between rich and poor.

A quick look at recent key statistics of the major industrial companies in comparison to the new technology companies in the United States demonstrates this striking story of social impact and value creation, but the serious problem of unemployment and sharing of wealth.

Google is one of the best role models of success in this new information age. It has been among the most successful in utilization of information, delivering broad social impact, securing a solid revenue base and creation of brand value. Yet despite this success and the fact that Google’s market value is five times that of General Motors, General Motors employs more than 200,000 people while Google employs only 20,000.

It is relatively easy to see why the new economy is creating anxiety and strong feelings of inequality. Jobs are disappearing and the value created is shared among a relatively small pool of individuals.

The social, economic and political challenges that have accompanied this new economy require that society and government focus their attention on job creation more than any other problem. Only stable job creation will solve the problems of social anxiety and dissatisfaction with wealth distribution.

In the case of Korea, significant job creation is only going to come from the service sector and from among the various service sectors, education, medical care and tourism are the most promising sectors where new jobs can be easily created.

More than anything else, the government and private sector should put greater focus on these three sectors and find ways to stimulate growth in tourism, educational services and medical services. Absent more and better jobs, we are headed toward a social revolution that will not serve us well.

*Revenue and value expressed in billions of U.S. dollars