The Services and Information Economy, Jobs and the Univeral Currency

The Services and Information Economy, Jobs and the Univeral Currency

There is a big problem with the type of services and information economy that was predicted in America by both Carl Sagan and Walter Wriston. The problem is Jobs. Wriston predicted about banking that: “In the future, all we will sell is information.” The problem is whether such an economy creates a sufficient number of gainful jobs to sustain our Democracy.

It is already evident that the lower rungs of our American economic ladder are filled with logistics providers - people using micro and e-mobility in our large cities to deliver food, documents and who use fuel efficient vehicles to transport people. Many of these logistics providers, newly arrived immigrants, are using fuel-efficient mobility; e-bikes, e-scooters for food and document delivery and delivering people by SUVs, cars and vans.

Amazon is using Rivian- built e-vans to deliver to the last mile everywhere in America.

Whether any of these enterprises are profitable depends on energy and the price of fuel. As Vaclav Smil declared, Energy is the only Universal Currency.

Carl Sagan’s foreboding about the future of our American economy reminds me of Vaclav Smil’s writings on energy. Changes in energy, Smil informs us, are slow and layered. So are the economic effects of science and technology. Even more ephemeral are the changes affected by politics and regime change.

The larger concern is whether all the fires started throughout the world by our foes will distract us from investing in the non-war related R&D and in the innovations that will drive gainful employment and solve such problems as climate change in the American future and in the future of the world.

Government and Transformation

IBD: Under the CHIPS Act, the U.S. Department of Commerce has announced nearly $34 billion in grant awards and up to $28.8 billion in loans to 20 companies across 32 projects in 20 states, according to the Semiconductor Industry Association (SIA). Among the top recipients is Intel-(INTC), which will receive $8.5 billion in direct funding plus $11 billion in loans for manufacturing according to the SIA. The company plans to build new fabs near Columbus, Ohio and Chandler, Arizona. Intel also plans to expand and resize facilities in Oregon and In New Mexico.

After Solyndra, government has been roundly criticized for getting investment in tech wrong. This is despite Apple getting off the ground thanks to an SBA loan and the promising results that are beginning to show from the Biden administration's investment in the CHIPS Act.

IBD: The CHIPS Act's goal is for the U.S. to reach 20% of global chip manufacturing by 2030, up from 13%, but that may prove to be a tough target to meet. Semiconductor plants are big, complex projects that take time to fine-tune equipment and processes to meet quality standards and sufficient product yields. The required workforce skills are in short supply. Pressures at certain chipmakers, especially Intel, could threaten some projects. And in the meantime, demand is shifting to new types of chips that could use more R&D focus.

"It could take three to four years from the time of funding to achieve high-volume manufacturing," Moor Insights & Strategy analyst Patrick Moorhead told Investor's Business Daily. "We will undoubtedly need a 'CHIPS Act 2 to meet that ‘20 by ‘30’ goal."

Will there be a CHIPS Act 2?

Another factor attending America’s investment in chipmaking and its focus on AI is the inability to find workers with the required skillsets.

“About 200,000 people in the U.S. are employed in chip factories and if they build the fabs that they're talking about, we’ll need 450,000,” an industry spokesman said. “So that's a lot of people that have to be trained.”

My comment: Not only are a lot of people to be trained in IT, Computer Science and AI, but now that America is reverting to Smoot-Hawley and the Age of Tariff Stupidity:

Smoot-Hawley

a lot of folks will need to understand and be taught global trade, global trade finance, logistics and how AI fits into the picture, so as to drive the profitability of AI Platforms.

Continued


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