Economic recovery, job creation, whatever you want to call it, everyone is trying to figure out how to get employment numbers back up and get the economy back on track. Seems that the situation is pretty severe, and we’ve managed to export it to all of our trading partners. But there is controversy over the information being reported. The news is in the position of impacting the tone, so they can make things sound bad, or not, depending on who’s data they use and how they phrase their comments.
Many analysts have commented that the reporting of employment data in the US has been manipulated over the last few years and, for example, there is a whole category of people who are unemployed and are not being counted because they are assumed to have quit looking for work. (How’s that for cynicism) And China has been accused of artificially holding it’s currency value low in order to minimize the impact of decreased exports. Interestingly, US exports are up significantly due to the weak dollar, so there’s at least some silver lining to the clouds of an economic downturn.
But the real road to recovery is based on real value. Technology is great, it enables a lot of new product concepts that make our lives more convenient. But the root is in the value that is delivered. That value can be something compelling, like the iPod, which offers the convenience of incredible portability and simplicity in delivering entertainment media, or a major improvement in the energy storage capacity of batteries which makes hybrid cars possible. The value that a product delivers is what makes it attractive and drives a customer to own it.
This means that technology cannot be dissociated from it’s economics. The electric car is still a challenge because a cup (about 20 cents worth) of gasoline contains enough energy to move a 2 ton car down the road to the gas station when you’ve run out. Which is a very cost effective exchange instead of you and several of your friends pushing your SUV to the next station to fill up. So an electric car should cost about the same to operate as a gasoline car unless there are many people who are willing and able to pay a premium to drive electric. And it’s getting there, and there are quite people who will pay the premium. About 300,000 a year now.
But there is no product on the market that is immune to improvement. So the thing that will really get the economy moving, and get people working, is product development. Any improvement that enhances the value of a product is important to the success of the US as a nation. That means everything.
That’s why the current dialog in the alternative energy sector is so important. Significant improvements such as direct drive generators in the wind market and lower cost tracking technology in solar offer big advantages in the overall economic performance of these technologies. This will reduce the amount of tax dollars that have to be used to subsidize the emerging industries. And I’m betting there are a lot more improvements to come.
So the road to recovery is improving value. In any product, in any market. And that’s change we can really count on.