The Primary Goal for the State of Colorado

The economy is stuck in neutral. But even worse, the economy has fundamentally changed and everyone is focused on trying to return to a world that no longer exists. We liberals castigate conservatives for wanting to return to the 1950′s with white picket fences. But many of us liberals are trying to return to a world with plenty of well-paid factory jobs. That world is also long gone.

It’s not just that factory jobs have been moved to China, it’s that many of those jobs have been eliminated via automation. And as 3-D printing moves into the factory line, we’re going to see the elimination of most of those jobs in China too.

When this country was founded 60% of the employment was on the farm. Now it’s 2%. We get more food but have done so while reducing the labor needed by 30,000%. The number of factory jobs needed have been on the same trajectory and even without outsourcing, most of these jobs have been going away.

We also have to embrace the fact that the world is flat. We are now competing worldwide. Some of us in industries where there is no advantage to any physical location (like mine), some where some advantage remains. But every one of us is now competing for work with people in Shanghai & Mumbai. And to compete successfully we have to embrace the advantages of that larger playing field, not bemoan the disadvantages of additional competition.

So what to do?

The future belongs to those who dominate in the key components of the global economy. In the last century America dominated because we had the largest and most advanced manufacturing base in the world. And we had a transportation infrastructure to match. That provided the basis for our economic and military domination of the planet.

Going forward the key component is education. The future belongs to the country, the corporations, the people who have the best education. And best is not just advanced degrees, it is degrees combined with creativity and a willingness to try the unknown. The future belongs to the Thomas Edisons, not the Henry Fords.

For the State of Colorado to be one of the leaders in the future, and not just a giant ski resort serving vacationers from other countries who better embraced the future, I think we need to focus on a primary goal. And I think we can get the leaders of both parties to agree to this goal. And that is:

The Primary Goal of the State of Colorado is for 50% of the adults age 25 – 55 to have a college degree.

Yes we have other serious problems that need to be addressed. But with an educated populace addressing the other problems becomes a lot easier. And without it, addressing the other problems is a lot harder. In some cases impossible. Because that educational level directly relates to higher tax revenue and lower unemployment.

We also have to face the fact that other countries explicitly have similar goals. China and India are very focused on getting everyone they can through college. They’ll be at this level in another generation or two. And some European countries are approaching this goal today.

If we get serious about education determines the future of this state. At present we’re headed for 2nd world status because we’re in neutral while other countries are full speed ahead.

22 Community Comments, Facebook Comments

  1. harrydobyharrydoby says:

    David, while I agree that more education is better than less, simply having more college-educated workers isn’t nearly the solution.

    I know a brilliant twenty-something guy with a dual degree in Computer Science and Physics from a great university who has yet to hold a full-time job.  Why?  He lacks the motivation and social skills to understand why interviews are about the company’s interests, not his own.  And in this unforgiving economy, his eccentricities are not easily overlooked.

    Simply having more college-educated people looking for work does not address the problem of a mis-match between what the economic opportunities are, or will be in the next 25 years, and the education we are providing today.

    I do agree with your fundamental thesis that the economy and the demand for particular jobs (and industries) have irrevocably changed.  That is the issue that needs addressing.  What will the jobs of the future look like?  Then we can adjust the educational solutions to fit the needs of the economy.

    As you say, the world is flat.  But it can be divided into segments as well.

    We have the hard goods economy — tangible items (food, clothes, shelter, art, etc.).  

    We have the soft goods economy — intangible items (information, creative content — art, music, literature, etc.).

    We have the inventors (scientists, artists) and producers (manufacturers, bakers, writers) of tangible and intangible goods.  We have the vendors (shoe stores, furniture stores, online retailers), aggregators (wholesalers, news services, book publishers) and shippers (trucking companies, telecommunications companies) of the goods, tangible and intangible.

    We have people that fix (or more likely replace) stuff (auto repair shops, tech support services) — tangible and intangible.

    The segments haven’t changed that much, just the means of production, the quantities or skills needed and the amount of money each role (job or unit of work) is worth.

    We will always need food, clothing and shelter.  It’s just that we can source all of those items from almost anywhere in the world.  

    With the rise of first, the information age (Google being the most recent incarnation of that model), and now the social networking age (Facebook, naturally), we have seen an entirely new era of creativity coupled with unheard of efficiency (iPods for music and video, smart phones, Netflix on demand content, etc.) replacing entire business models – video rentals, phone booths, music stores selling LPs, CDs, or tapes.

    Communications infrastructure (fast Internet backbones and connectivity to homes and businesses)  provide an extremely low cost of delivery of content – whether that is creative content, or intellectual labor (tech support, software development, information production, eg. News, entertainment, processing insurance claims, etc.).

    In order to have a healthy, growing economy, we need to have a virtuous cycle of demand.  When that cycle is broken, ie. high unemployment and frozen markets (can’t buy a home if I can’t sell my current one), then we find ourselves in this current predicament.

    What to do?  

    As delivery of intangible, or intellectual labor becomes virtually cost-free, it becomes feasible to lower the unit of measure of that work.  Almost like piece work, it becomes economically efficient to charge miniscule amounts for tiny bits of content, but in aggregate will amount to a living.  Sounds simple, but I know in practice this will be a painful adjustment for most of us unless there is a support system to facilitate this.  I would think it is an opportunity for a skills aggregator, something like Monster.com.

    But instead of the goal of connecting large employers with full-time employees, it is more about connecting a content producer (a skilled individual) to as many content or service consumers (businesses) as they can support.  The rest of the supply chain remains pretty much the same.

    Underlying all this brave new economy is the fact that without a healthy, mobile (and yes, educated) workforce, we will become a second-tier economy.  We need two more things to succeed:  1) efficient, universal health care, and 2) a reset on the home mortgage market.

    The reasons are simple — with employer-provided health plans shrinking rapidly, we can’t shift those costs to taxpayers through today’s extremely costly and inefficient delivery model.  Byzantine bureaucracies of the insurance industry driving private medical practices out of business, perverse incentives to drop patients, etc.

    Secondly, we have to recognize that the housing bubble was in fact, not just unsustainable, but will be a cancer on our economy until we confront it with more than pitiful half-measures.  Prices (and the underlying mortgages) need a massive reset, as painful as that will be.  But we must unfreeze the market to restore liquidity and resume a more moderate, but stable growth curve.

    • DavidThi808DavidThi808 says:

      But there is a lot of power if we can get the leadership of both parties to agree on a primary goal. That’s what Taiwan, Japan, and South Korea did so elections were about who would improve education better, not should that be important.

      And it’s not an excuse to ignore the other problems.

        • harrydobyharrydoby says:

          Ran across this interesting tidbit: Race to the top of markets, not the bottom.

          And this: German Industrial Policy.  Admittedly, Germany has a much more unified mindset that us at this juncture.  Since our politicians can’t even agree on the problem, finding a likely solution is pretty darn impossible.

          • Sir RobinSir Robin says:

            You know Germany is a very high-wage producer but it’s an export superpower. And the reason is it has an industrial policy that insures that the companies keep high quality jobs in Germany. And we’ve got to move to that and that will take a very different set of policies than begging the Chamber of Commerce to be patriotic.

            It can be engineered, and government has to do it. We’ll see how important the Tea Partier’s principles are when they’re sick, hungry….or both.

            • Diogenesdemar says:

              even before I read your point.

              David, make this statement to your average German citizen . . .

              It’s not just that factory jobs have been moved to China, it’s that many of those jobs have been eliminated via automation. And as 3-D printing moves into the factory line, we’re going to see the elimination of most of those jobs in China too.

              . . . and he would laugh in your face with glee.  Laugh because of its demonstrable absurdity, and laugh with glee because he knows that it will be German factories that will be building the machines that manufacture the necessary precision parts for those 3-D printers.

              Humans will stop manufacturing the day that the human race ends.  The trick that has escaped us, (actually, was pissed away and flushed down the toliet . . .) is to be leading with the types of manufacturing that will be needed to build that future.

              We will continue to pay the price for our supreme shortsightedness as long as we continue to indulge that fantasy that some futuristic advanced technology will replace manufacturing in importance to human enterprises.

              Automation will continue to replace menial labor, but it will not end the need for and importance of real “manufacturing.”

    • DavidThi808DavidThi808 says:

      If we have 5 top priorities then we really have none because you are always juggling them and can excuse minimal action on one because you’re focusing on one of the others.

      I think we still have urgent problems that need to be addressed. But there is a lot of power in having a singular top priority.

      • harrydobyharrydoby says:

        Then aren’t we just building a stadium, assuming they will come?  What if we build a road, and no one chooses that destination?

        Education isn’t the goal, in and of itself.  Encouraging creativity, grounded with knowledge, tempered by experience is what I see as our unique competitive edge.  

        But we also need to build the infrastructure and support system for a whole new productivity model.

        What I’m proposing is that we need to adapt to the new economic reality by reshaping the notion of a “job”.  We need more of them, obviously.  

        How to create them isn’t.  While the government can and should play a role (industrial policy is just one means), call me a Republican, but I actually believe this is something a gutsy, well-funded entrepreneur is best suited to handle.

      • harrydobyharrydoby says:

        That’s the philosophical difference between our views.

        While increasing the number of college graduates certainly increases the supply, it does nothing to insure demand for their skills, whatever they may be.

        We currently have an abundance of supply, for good or ill.  So providing a powerful outlet for their abilities would spark pent-up demand for efficient, relatively inexpensive (not due to low wages, but rather because they are time-shared with many other customers) suppliers of intellectual labor.

        • DavidThi808DavidThi808 says:

          The biggest challenge my company faces is hiring. And pretty much every other software start-up in the area has the same problem.

          • harrydobyharrydoby says:

            This diary was calling for generically increasing the number of college graduates, which is what I was responding to.

            Now you have narrowed the problem to a specific job role and geographic locale.  Different criteria, and calls for a different solution.

            While there may be a shortage of software recruits in your price/skill/locale, nationwide, there isn’t a shortage.  Given the growing prevalence of remote workers, I would suggest you not worry too much about face-to-face interviews or relocating someone to Boulder.  Rather, take advantage of the communications infrastructure, and find a qualified worker in perhaps Denver, Ft. Collins, or gasp(!) Austin, TX, etc.

            • DavidThi808DavidThi808 says:

              For some of the positions here, like admins, the skills required are pretty general. But it’s unlikely (not impossible) that they’ll meet our requirements if they haven’t gone most of the way through college.

              ps – And for our industry specific jobs the shortages are not just local, they’re worldwide.

  2. sxp151 says:

    1. Lots of educated Coloradans grew up elsewhere; I suspect that’s more true of our state than most.

    2. An easy way to achieve your goal is higher unemployment, since that affects non-degree holders much more.

    You might want to refine this goal a bit.

    Also what is the current percentage?

  3. Car 31 says:

    You remind me of a girl I knew overseas. When trying to identify needed resources for native populations, she wanted to work on vision statements and guiding principles. She didn’t want to (or couldn’t)see the reality that people didn’t need a vision, they needed water pumps.

    You talk about the historical market changes and the advocate for a singlular state goal of more college graduates.

    Here’s some things you forgot to mention:

    Agriculture, which you minimize in your post, brings in more than $7 billion dollars annually to Colorado and provides 105,000 related jobs.

    Tourism, which you didn’t even mention, brought in $8.8 billion last year to the state – generating $689 million for state and local tax revenue. In 2009, Boulder benefited from $374 million in tourism dollars and supported 5,370 jobs.

    How much in taxes did your industry pay in ’09? According to the Metro Denver EDC, clean tech provides 19,000 jobs. Not bad.

    The reason I go through this with you is your goal of college degrees for software companies is myopic at best. The goal for Colorado should be to put Coloradans to work, no matter what the industry or locality. I appreciate your passion for high tech, but we need to focus on keeping existing jobs and workers in Colorado, as well as recruiting new companies.

    Education is essential, but we need to figure out the fiscal know we’ve tied our hands with before we can even begin to fulfil a vision as obscure as yours.

    Agriculture and tourism are largely rural industries. Traditionally Colorado has relied on metro economic development organizations to recruit new businesses along the Front Range and the I-70 corridor. Colorado needs to begin focusing on our rural communities as well before we lose the character this state entirely. You’re from California (aren’t you?), you may not undertand this.

    And, by the way, you may want to adjust your sig line to mention BPPT. Also, I don’t think I said we shouldn’t try finding a solution, I think I said your proposed solution was stupid.

  4. cunninjo says:

    Our economy has out-grown itself meaning Americans alone cannot provide enough economic demand to maintain our standard of living. This is because we now rely on cheap goods imported from other countries to satisfy our demand for basic needs. We can’t (and shouldn’t) compete with foreign manufacturing companies because the only result is that either our wages move downward towards their wage levels or prices on those goods skyrocket.  

    Instead, we need to find new sources of economic demand. To do this we must focus on exporting the goods and services that make us exceptional to developing countries around the world. The goods and services we produce are expensive and out of reach for many of the world’s consumers. We need to further invest in stabilizing and growing the economies of Africa and many parts of Asia. This could potentially add a hundreds of millions, if not billions, of new consumers into the U.S. market.

    David, education is always important but the trend in American education is moving more towards teaching students mostly technical skills and less creative skills. Yes, it is important that students know mathematics, science and technology. But without developing creative thinking through art, music and literature we hinder our ability to innovate.

    • harrydobyharrydoby says:

      The thought of helping create even more cultures desiring $4 cups of coffee while millions of their own citizens live in abject poverty in India and China is a bit revolting.  Particularly as China is building about 2 coal fueled powerplants per week to keep up with demand.  Not to mention they are surpassing us in oil consumption and pollution.

      However, creating new markets through increased prosperity does have a few upsides.  For example, in many third world countries, cell phones dominate because economically, it makes much more sense than trying to lay millions of miles of copper wire.  

      Similarly, it would make some sense to help build out the power infrastructure with a focus on solar, wind, and even natural gas powered fuel cells instead of dirty coal.  The grid would also be highly distributed and not concentrated in massive generation facilities vulnerable to terrorist or rebel strikes.

      One of the biggest obstacles for these technologies domestically is opposition by the vested interests in old energy, and the fact that economies of scale haven’t been reached yet for the new energy technologies.  Expanding markets overseas would address both of those issues in the long term, and add the sort of highly skilled, high-paying jobs we are trying to produce.

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