Welcome to the Ephemeral Economy

Over the last 35 years, the US economy has created jobs in the service sector at a faster pace than in the manufacturing sector. We’re no longer producing toothpicks in New England; our socks come from China, and our notebook computers are assembled in Korea. GM has almost run out of gas, and we’ve industrialized food production to a quality level at which chicken breasts taste like egg cartons and dog food has more nutrients than a hamburger. The loss of the blue-collar worker is now replicated in the service sector. We’ve entered what I’d like to call the “ephemeral economy,” which delivers software products and applications in the cloud for a monthly fee.

While manufacturing produces solid, tangible products, and the service sector creates predictable experiences, the ephemeral economy delivers fleeting, flowing, yet fabulous information in the cloud. The ephemeral economy has spawned tens of thousands of companies that create software applications that intelligently store, retrieve, organize, and move and display information. Their competitive weapon is their code, and over the past three years their code has cannibalized the music industry, the newspaper industry, the magazine industry, the book industry, and the printing industry. Like the DaVinci code offered clues to the investigators, the Internet code — let’s call it the “DaVanish code” — left some of the brightest people in the publishing and printing industries clueless as to who slowly disowned or devoured them. By 2011, printed products will be decorative novelty items.

In the industrial age, the sultans of success were the manufacturing giants who traveled in private railroad cars and crossed the oceans in their private yachts. In today’s ephemeral economy, the kings of code travel in private jets that emit condensation trails that turn into clouds where, according to the kings’ marketing declarations, their software resides.

With all these innovations and dizzying changes, the American economy has not advanced or enhanced its value in the past 10 years. On January 3, 2000, the Dow was at 10,921. Ten years later, the Dow is at 10,583. In the past decade we’ve worked hard but slipped sideways.

While the ephemeral economy builds a new ark, the displaced economies engage in futile attempts to slow down the sinking of their Titanic. I hope 2010 will be a year in which we realize that we’re all interdependent, with a dramatically rising need for better collaboration on all levels.

The world has gotten smaller. We can no longer escape from or ignore one another. We need to replace the “DaVanish code” with the “DaMaximus code” and create more opportunities for everybody.

Happy New Year!