November 07, 2009

The End of Detroit

This Wall Street Journal article by a journalist with a seemingly Indian name lists the myriads of misfortunes Detroit is in ...

http://online.wsj.com/article/SB10001424052748704013004574517700766354972.html?mod=djemEditorialPage

I remember Lee Iaccoca's autobiography where he he remembers landing at the train station and asking for the direction to Detroit and someone telling him: "Go West young man."

Times have changed drastically since those days when the automobile industry was the throbbing heart of a vibrant manufacturing economy.

Today, we live in a world and the services sector dominates and the knowledge economy is where everyone wants to be. Old fashioned factory townships with assembly lines manufacturing goods that everyone wants to have ... that has pretty much shifted out of advanced economies like the United States to developing economies like China and India.

To a large extent, that's a positive development for these countries as basically manufacturing jobs don't require too much intellectual ability ... as shown by the fact that high end automobile manufacturing work is performed by robots today everywhere from Japan to Germany and other countries as well.

Humans have moved on to performing jobs that require a higher level of intellectual ability. But such a shift leaves people with less education and skills in a difficult spot.

Being a moderately educated person in an advanced country like the United States would offer a person with very limited work opportunities indeed.

It's a challenge for these advanced nations to stay ahead of the intellectual curve and yet have enough of social safety nets so that those happen to fall by the wayside in the "rat race" are taken care of in an adequate manner.

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