This is in response to Where Are the Jobs?
I agree with the premise of the analysis presented by Professor Cappelli that the severity of downturn, productivity gains and growing workforce make this a long and painful jobless recovery.
He also correctly concludes that the GDP will have to grow at a faster pace than it has so far to create sufficient jobs to offset the productivity gains and absorb growing workforce; and eventually make a dent in the high unemployment number.
He further surmises that the workforce retraining and employment incentive are, therefore, not necessary.
Nothing could be further from reality. It seems that we all agree that we live in a global economy; however, we seem to have difficulty looking beyond US as a market for our products and services.
American market has been viewed as a lucrative market by businesses worldwide. We have been the exporter heaven for foreign businesses for decades. We have been so used that concept that we forget that there are markets outside the US borders which could prove just as lucrative to US businesses.
Let me illustrate this point with the following. It was recently reported in Indian media that the bilateral trade between India-China, two of the largest markets and two of the fastest growing economies, exceeded the target of $60 billion for 2010. It was also reported that India-China trade is projected to exceed $120 billion by 2015.
What is worth noting is not the numbers themselves but the fact that significant amount of the 2010 trade came from India's purchase of Telecom and Power generation equipment from China.
Does China have superior technology than US? Why aren't US businesses able to win technology contracts?
It is one thing to not be able to compete against China in low end consumer products but it should be a serious cause for concern when we cannot compete on the technology front. It will require much more than mere productivity gains for the US to remain a leading player in technology and technology products in global arena.
Let us face it. The US domestic market is saturated. We must look at global markets for opportunities to grow our GDP and employment.
There are many markets with tremendous growth opportunities around the world. But to seize those opportunities, we must look at retooling of our plants and processes and at retraining our workforce.
We need to invest in plants and equipments so we can increase operational efficiencies, reduce energy costs and lower our product/service costs.
We need to adapt new technology assisted processes to improve everything from R&D and manufacturing to operations and distribution; and everything from marketing and sales to customer service.
And, we do indeed need to invest in skills training/retraining of our workforce to be able to work efficiently with the new equipments, systems and processes.
What we basically need is the new business management mindset, one that regards its workforce as valuable Human capital and takes just as good care to manage and deploy as its financial capital.
When we have only 29 percent of the workforce engaged in their work, we have a serious issue. We must recognize this challenge as it directly affects our global competitiveness.
We need to invest in people-both current and FUTURE workforce, educate/train them for work in new economy, provide proper JOBFIT and provide opportunities for personal growth. If we succeed in doing so, people will become more invested in their work and their organizations. The workforce engagement will grow, the productivity will soar and our competiveness in the global market will grow which will help grow our GDP and, ultimately, the employment.