If you went to bed in the 1970's believing that manufacturing was the means to create and sustain the economy, please wake up. For the past three decades, fortunes in our country have been shifting away from traditional manufacturing and towards knowledge based economies. Consider Google. The New York Times reported on 10-31-04 that Google's market capitalization exceeds both Ford and General Motors combined. The innovation economy is eclipsing the production economy. Fortunes are shifting. Even Ford knows it. In the third quarter, Ford's PRODUCTION of cars lost over $700M while their FINANCING of cars netted over a Billion. Even at Ford, one of our country's first and most celebrated manufacturers, fortunes are shifting to knowledge-based business services, the trump card in wealth-creating economies.
According to Shifting Gears: Thriving in the New Economy (Beck, 1992), a regional economy with "High Knowledge" industries is well positioned to thrive. In this case, knowledge occupations are identified as managerial, professional and technical workers. Industries that are "high knowledge" have more than 40 percent of the occupations in knowledge occupations. Here is Beck's list of High Knowledge Industries:
Drugs; Computer and office equipment; Communications equipment; Guided missiles, space vehicles and parts; Search and navigation equipment; Measuring and controlling devices; Radio and television broadcasting; Funeral service and crematory; Advertising; Consumer credit agencies; Computer programming and data processing; Motion pictures; Health services (excluding nursing and personal care facilities) Education services (excluding libraries); Individual and family social services; Child daycare services; Museums, art galleries, botanical and zoological gardens; Membership organizations; Engineering and management services.
How does your economy measure up in these High Knowledge industries? Are High Knowledge industries represented as well as traditional manufacturing in your region?
For more information, see "Can Rural America Support a Knowledge Economy" by Jason Henderson and Bridget Abraham, http://kansascityfed.org/
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