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Investigating the Economic Implications of the Connected Future

Things are changing very, very quickly in modern society, and it isn’t just technology that is shifting. There are important, positive changes taking place in the global economy, and it is important to understand not only the principle of rapid technological change, but the economic impact it is having—especially in terms of lighting.

We are living in an age of uncertainty, and it is generating anxiety on multiple levels. First, cyclical, short-term sources of uncertainty exist, including:

  • The U.S. Federal Reserve’s increase of interest rates now that the effects of the Great Recession have faded
  • Speculation as to the future of the Eurozone as the economies of Greece and a few other countries threaten the longevity of the monetary union
  • Concern raised by China’s current anti-corruption campaign and stock market instability, which causes some to wonder how sustainable China’s recent robust growth can be

While these short-term drivers of uncertainty are important, arguably more important are longer-term structural drivers—things like rapid technology change and the rebalancing of economic growth worldwide. Structural uncertainty is especially troubling because it often leads not only to anxiety, but pessimism: Economists see economic growth in advanced economies slowing, and are discouraged, for example.

This pessimism can be short-sighted. Overlooked, for instance, is the fact that emerging markets are growing at a rate far higher than most of history—with the exception of the 2005-2007 bubble period—and that growth is forecast to remain high. Projections for overall economic growth actually look positive for this reason.

While the world is changing and uncertainty is understandable, it is important to realize that one of the key drivers of change—advancing and increasingly interconnected technology—makes the economic outlook for the future far rosier.

For the greatest chance at success, organizations must view technology-driven change not as a threat, but as an opportunity.

Those who are apprehensive may look at Edison’s invention of electric light or the invention of the steam engine as powerful innovations that propelled humanity forward. After an adjustment cost has been managed and proper education/calibration has taken place, one will find that technology has always created more jobs and opportunities, rather than destroy them. The same can and should be expected in the future, too.