It’s understandable technologists see technology as driving change. Often it’s true – technologies do build or destroy businesses, alter economies and collapse empires.
Sometimes though there’s more to change than a new technology changing the economy and while it’s tempting to credit innovations like the web, social media and cloud computing with many of the changes we’re seeing in the world, we have to consider some other factors at work.
The end of the 40 year credit boom
In the 1960s, the United States started creating credit to pay for the Vietnam war; they never stopped and after the 2001 recession and terrorist attacks the money supply was kept particularly loose.
The worldwide credit boom allowed all of us –Greek hairdressers, Irish home borrowers, Australian electronics salesmen, US bankers and pretty well everyone else in the Western world – to live beyond our means.
In 2008, the start of the Great Recession saw the end of that period and now the economy is deleveraging. Consumers are reluctant to borrow and businesses struggle to find funds to borrow even if they want to.
Any business plans built on the idea of almost unlimited spending growth are doomed. The era of massive consumer spending growth driven by easy credit is over and the days of expecting a plasma TV in every room are gone.
The aging population
An even bigger challenge is that our societies are getting older, the assumption we have an endless supply of cheap labour is being challenged as a global race for talent develops.
The lazy assumption that economic growth can be driven by building houses and infrastructure to meet increased demands will be found wanting as the Western world’s populations fail to grow at the rates required to power the construction industries.
Our societies are maturing and increased economic growth and wealth is going to have to come from clever use of our resources.
Innovations in computers and the Internet – along with other technologies like biotech, clean energy and materials engineering – will help us meet those challenges but they are tools to cope with our transforming societies, not the agents of change themselves.
Had tools like social media come along in the 1970s or 80s they probably would have been massive drivers for change, just like the motor car and television were earlier in the 20th Century. In the early 21st Century they have been overtaken by history.
Smart businesses, along with clever governments and communities, will use tools like social media, local search and cloud computing with the demographic and economic changes, but we shouldn’t think for a minute the underlying challenges will be business as usual.