The changing of the guard -- Music for the Masses ?

Old problem, but worth analyzing in the context of today's business climate.

Remember when people used to work for IBM for 30 years and get a pension and stability for life. Even before that, during the days of henry ford and standard oil, sons and fathers worked side by side providing sanctuary for multiple generations. But that's all changed now. 401(k)s aren't even matched at most companies now. The US is not even the undisputed economic powerhouse anymore.

Google IPO'd about 5 years ago, and wasn't even around 10 years ago. Now they are the biggest name on the planet. Just as everyone's darling Apple surpassed Microsoft as the world's most valuable tech company, they are falling behind in the mobile and tv content markets. E-books passed hardback sales last quarter for the first time. There are no safe havens anymore. No time clocks.

As a free market technologist - I love it. Big companies must stay on their toes. Thanks to technology, barriers of entry are dissipating. Fledgling startups can transform markets, give consumers what they actually want, and create meaningful jobs in their own right. There are so many david vs. goliath stories that it makes you feel warm inside and it feels like a tribute to what this country was built on. Hard work, entrepreneurism, and a true meritocracy.

The game has changed though. The level of sophistication required to play is so high, that most are kept out. These startups provide good jobs and have great cultures - but have you seen the profiles of who they hire ? High-level, educated engineers, marketeers, and product development guys (i think everyone has heard about google's grueling interview process).

So what about the folks in Detroit that lost their jobs ? Or even the lower to middle class folks that get a decent education, but not a top-notch one? You see this trend highlighted now in an era of ~10% unemployment. There are jobs to be had right now -- its just that most people don't qualify. And companies (rightly so) will not hire suboptimal candidates. They'd rather wait for the perfect one. Unfortunately - this creates a larger divide between the people that have access to education and techonology and those that don't. I believe this trend helps the wealthy and privileged at the expense of the poor and those without access to opportunities.

Also, the uber-Technology and automation today's society demands creates the kind of operating leverage for corporations that require less jobs. The assembly lines are obviously disappearing, but even more so, much of the heavy lifting is done by software/hardware platforms. Especially back office functions like processing, payroll, even picking and delivery in some cases. Just by sheer numbers, the Googles and Facebooks of the world will require less employees than IBM or Standard Oil back in the days. Sure, the US can compete for foreign business - but its just a first mover advantage. Other countries will surely follow suit and look for business here in the US.

So the trend is that the US requires less jobs and are now raising the bar on quality jobs to the elite or those with access. Who's going to fill the void? Obamacare? I want to see the middle class thrive not divide. From a jobs standpoint, isn't technology creating more "have-nots" versus "haves"?

So what's the solution? I want to see upstarts thrive. I hate beauracracy and inefficiency more than most people. But how can these upstarts create the breadth of jobs that fit the demographics of the US population? How will they help the millions that are having difficulty transitioning from the old guard to the new guard?

Keep Fair Trade Fair.

I've always been a huge proponent of capital-based social ventures. Since free-market systems generally result in more efficient allocation of resources, it only makes sense that the same principals would extend to the non-profit/community realm. For years, self-made billionaires have used market based strategies to combat poverty, eradicate diseases, and create world class educational institutions. The Gates Foundation is a perfect example as their lofty goals are being realized utilizing a rigid, corporate-based approach to management (They are also quietly building an elite club to encourage the wealthy to give away their billions). The hope is that business rigor will result in superior results versus traditional non-profit entities.

For years I've been tracking microfinance, social VC's, nonprofits and other social ventures. Something i've been hearing about recently are so-called Fair Trade companies. There are national and international standards that ensure compliance to ensure the production of goods are fair-wage, eco friendly, and a whole host of other goals. There's one I really like called the world of good that recently sold to ebay; the founders spent most of their time traveling the world to buy products directly from local artisans. They helped the poor of the poor with access to worldwide consumers while ensuring the artisan the lion's share of the profit on a sale. From a consumer standpoint, it gives them a clear alternative to mass-produced, homogenized goods.
A win win win.

But i get a bit skeptical when i hear new buzzwords being quoted everywhere. And "fair trade" seems to be the mot du jour. Just this morning I heard a story on NPR about an African born, US raised man go back to Africa to build a factory and sell "fair-trade" t-shirts. Is this becoming just a marketing ploy (vis-a-vis "green" technology) ? Has it become merely a new entrepreneurial opportunity? Will the altruistic focus lose out to an extra $1 of profit per product?? Let's hope not. For the artisan's sake. And for the sake of poverty alleviation.

You are already starting to see this in other social entrepreneurial realms. You hear about usury interest rates and unfair lending practices in microfinance. This sector has now become so profitable, that all big banks are jumping into the fray. The first microfinance IPO took place with SKS in India. When push comes to shove, will a publicly traded company succumb to the demannds of investors or of the small business owners ? I think the answer is obvious.

Let's be optimistic and hope that Fair Trade blows up just like microfinance did. Let's hope millions of small artisans and entrepreneurs around the world gain access to the worldwide consumer. And let's hope the flailing Fair Trade companies do not think profit first, fair trade second. Let's hope they keep Fair Trade Fair. The beauty is the consumer ultimately decides. It should continually demand transparency and rigorous standards.