An Argument For Entrepreneurialism Most peoples knowledge and skills are pointed toward the labour market because thats what weve been taught to do. Work work work, selling your knowledge and skills to an employer. You cant actually get more money out of the employer, an incremental wage rise at best, but wages are flattening out. You can take the knowledge and skills you already have and turn that into capital getting very well rewarded for it. Its not about reinventing yourself, its about taking the knowledge and skills you already have and pointing them at enterprise, instead of pointing them at the wage economy. Now thats a step to the left and if you can shift your mind youll be well rewarded for it. Thats what entrepreneurialism is all about. Wages are not growing as fast as capital so if you cant afford to buy capital, if you cant afford to buy lots of houses or buy businesses, fine set up your own because now the internet and the growth in technology gives us the opportunity to do that. You may not know how to do that but thats what taking opportunities to learn is all about. To offset the fact that wages are not growing as fast as capital, you have to increase your capital, you have to increase your value to an enterprise market instead of a wages market. Erik Brynjolfsson says inequality has increased in almost all countries of the world, especially in advanced modern countries. 17 of the 22 OECD countries have seen an increase in inequality in recent years. Do you want a future thats controlled by a dying economy, or a future you are in control of just requiring a few skills. If you take the worlds richest 1%, they are worth on average 27 million dollars each. You have to do something to see yourself in the haves, not sitting back passively and waiting for something to happen which will guarantee you go into the have nots. So to profit from the economic changes ahead youve got to convert your current knowledge & experience into capital and focus on the drivers of change. That’s the gold rush Im actually talking about. Not everyone is doing it because they are still stuck hoping and anticipating that the good news thats coming out of America will continue but that’s the winners curse because everything will rocket up until it gets to a point where it cannot sustain itself, then it’ll implode. When you focus on the drivers of change, you can position yourself for the opportunities that are coming down the pipeline. No one knows when the next crash will happen so you have a few years to gain those skills. Estimates vary from 2016 to 2024, but all the brightest economic thinkers are in unanimous agreement that its not a matter of if but when. Unless this happens, says economist Tyler Cowen, you run the risk of the hollowing out of the middle classes in the OECD countries. In other words the middle class gets separated into the haves and have nots. The interesting thing to know about this, is that the global middle class is actually growing in size. Figures suggest 2 billion from other countries are emerging into the middle class. So its this hollowing out of the middle class that you need to watch out for. Cowen offers a timely account for how much automation, globalisation and better measurements of value are cutting a swathe through manufacturing jobs and service industries that are rich in developed nations such as the OECD countries. One of the biggest groups being impacted the most are women born around 1960 who were once identified as having a very important role in terms of nurturing and rearing children. Lets say those women raised children who have now left home and lets say their relationship breaks down. How do they now support themselves when the workforce is biased against them? So now they have to go from what was a middle class lifestyle onto welfare of some description. From March 2000 to March 2013 affordable one bedroom apartments in Melbourne are diminishing. This is whats happening to those women, theyre paying in excess of 80% of their total welfare payments just on rent and they are having to survive off the smell of an oily rag. One lady says she is not living on the street but she can understand it happening to anyone. When you read the papers you will start to see this business of the middle class of Australia being what is referred to as hollowed out. From The Age, Middle class, hard working and homeless, The hollowing out of the middle class, RIP Middle class. As rocketing inequality continues, the wealth divide in western economies starts to accelerate more rapidly and the middle class starts to become a thing of the past. Those born in the 50s and 60s were flooded with TV shows which were all about the activities of the middle class. My Three Sons, I Love Lucy. Now theyre all gone, replaced with reality shows. In a strange twist Tyler Cowen notes that those lucky enough to be left with jobs will increasingly find themselves under greater online scrutiny. If you have ever heard the term big brother is watching you, well its not a joke its happening. Your value to employers undergoes a re-evaluation because companies can now scrutinise the value you bring to the job, and your value will be reassessed. Your work is being monitored more than ever before and there is a record of everything you do online and for the company. Online scrutiny means the value to your employer is now measured more easily. Now and into the future you are going to be paid what you are worth, not what you do. The more you measure value, the more you discover that some workers are actually worth more than what you are paying them and some are worth less. When you discover that, you either fire them or pay them less which boosts the inequality gap, hollowing out the middle class. Because there are now better measures of value, if you stay with old models the value you produce and the value of wages now just keeps getting squeezed. Rapid changes in the economy means that you can do something about it or get squeezed. Again there is no passive way through this, there is only an active way through it. Stay tuned for Strive Not To Be A Success But To Be Of Value. Until then its bye from me.
Posted on: Sat, 24 Jan 2015 08:32:31 +0000
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