There are many ways to create jobs. The 2008 stimulus created some jobs directly at the local level at a cost of around $115k each, or an 18 year payback. We can also simply wait for the “Recovery” that is supposed to occur and hope it all turns out well. There are also steps that can be taken to transform the economy and speed up restructuring.
All of this would be minimal and possibly wasted according to Jim Clifton, the CEO of Gallup. His book “The Coming Jobs War” (which came out last September) outlines how good, meaningful jobs are going to be scarce around the world – and subject to intense competition at all levels. His proposal is not expensive or even likely to be controversial, but it does require new attention and care from everyone. It also requires very dynamic leadership, an even scarcer commodity.
The basic premise is simple: developing nations are rapidly industrializing and their populations are seeing their standard of living increase. China now has the majority of its population in cities for the first time, and poverty is declining in places like São Paulo. For this to move forward, productivity will have to continue to increase all around the world and something like 1.8B new jobs will be created in the next generation. Where will those jobs be? Who will create them?
In essence, the problem in front of us all is a very dynamic global economy that is ours to master, if we do it right. Failure to do so will likely see us left behind. And the centerpiece of everything is job creation. This is critical because the most valuable resource of this or any other nation is its people – their hard work, their brains, their compassion, and their creativity.
That’s where Clifton sees three major changes that will have to occur:
1. “Innovation is not scarce. Entrepreneurship is scarce. We are spending billions and wasting years of conversations on innovation and it isn’t paying off. Great business people are more valuable and rarer than great ideas.
2. A useful way to look at any citizen is this, ‘Can she herself create jobs or does she need a job created for her?’
3. “It is wrong thinking to imagine that Washington has solutions. Job creation is a city problem. There is great variation in job creation by city in the United States. San Francisco and the greater Valley keep pumping away while Detroit isn’t. Austin’s cart works while Albany’s doesn’t. Cities need to look inwardly and say, ‘What can I do to create great economic energy, to bring new customers for all existing companies and start-ups?'”
If you read this and immediately leaped to a conclusion that involved a policy already debated such as “lower taxes” or “more job subsidy”, you are wrong. It doesn’t matter what politics your assumption came from – an effort like this is not described by our current politics in any useful way at all.
Clifton arrived at his conclusions studying the reams of data that Gallup collects constantly on many things, including job creation. What he found is something that nearly any of us who are always looking for work have long known – that employment is gained one networking conversation at a time. Furthermore, the simple fact that around universities and other centers of innovation there are many good ideas languishing because there is no one who can implement them. Connecting people to people can get them hired, but connecting the right people with good ideas can create a new company – or even a new industry.
What Clifton is proposing is an aggressive effort to redefine how we think about work modeled along the lines of what I have called Connections Theory. While there are some critical areas where Washington can help change how tax and regulate employment, the real efforts have to come in cities – primarily from business leaders and education institutions.
I strongly recommend this book and Clifton’s way of thinking. Follow the links to read some interviews and reviews that will shed more light on the topic.