Feb

5

Jobless Recovery : Innovation Food

February 5, 2008 |

Some people measure economy in Gross Domestic Product (GDP).  Some others measure it in unemployment rates and number of jobs created.  CNNfn is suggesting that our GDP will recover, but our job market will not (bear in mind our 4.9% unemployment rate is one of the lowest ones in the industrialized world).  I think a new measure should be followed (along with the others): utilization of the human capital.

One of the things that differentiate humans from animals or machines is our capacity to innovate.  To find new ways of doing the same thing better or doing something completely new and different from which we all can benefit.   I think the capacity to innovate is key to moving an economy: to producing goods and services of a quality unique to that economy, and of improving the manufacturing (or production) process to accelerate growth.

Some people just love to innovate.  Even if everyone else was innovating around them, they would innovate just as much.  Other people need some stimulus.  When companies are not hiring, but the economy is producing and circulating money (GDP), people find themselves in a unique position that motivates them to start their own business.  Companies do not want to take the risk to hire, but have money to spend.  This is your opportunity to provide the goods and services they need at a price point that is more competitive for them than hiring their own employees.  They are about to outsorce the job anyway, you just allow them to keep it in the same country.

On jobless recoveries people also have money in their pockets.  Think about the economy now vs. the economy 10 years ago before the last jobless recovery.  At that time people didn’t splurged $500 on a video game console, or $500 on a phone.  Years ago people would not have splurged $5 on a cup of coffee either, nor would have paid $100 day for dog day-care.  Today they do.  You just have to innovate and provide things on which they are willing to spend their disposable income.

Although I do not share the vision that we will go into a “jobless recovery” (I think we already have jobs), I do think that those who find themselves unemployed, or under employed should consider entrepreneurship and innovation.  Also, those who find themselves at a plateau on their careers should also think about going on their own (to innovate and produce) and leaving that job for someone who needs to grow within his/her career.


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