In The Great Reset, Richard Florida writes that the current US economy is going through a fundamental change, and we won’t be going back to the way things used to be. New ways of working and living will drive the next recovery, just as with earlier Great Resets.
The current Great Reset is a product of 30 years of manufacturing and blue collar jobs shifting to professional, technical and creative jobs. In this Third Industrial Revolution, the economy shifts from “making things to one that revolves around knowledge and creativity”. Florida sees these trends:
- Declining purchases of consumer goods, such as cars; increased purchases of experiences (travel, wellness and fitness, entertainment, and self-improvement)
- Suburban housing is less popular; housing in knowledge-oriented cities is more popular
- Increased energy awareness and being green
- With the end of lifelong employment, “career success for young people depends on locating themselves in a thick job market that offers diverse and abundant job opportunities”
- As flexibility and mobility become more important, renting will be favored over home ownership, which limits mobility
How much credence should we place on these trends? Hindsight is wonderful here. The Great Reset was published in 2010. Do these forecast trends look right three years later? A transportation report discussed on the front page of today’s San Francisco Chronicle (the city’s daily newspaper) says
- “Young people aged 16 to 34 drove 23 percent fewer miles on average in 2009 than they did in 2001—a greater decline in driving than any other age group. The severe economic recession was likely responsible for some of the decline, but not all.
- Millennials are more likely to want to live in urban and walkable neighborhoods and are more open to non-driving forms of transportation than older Americans. They are also the first generation to fully embrace mobile Internet-connected technologies, which are rapidly spawning new transportation options and shifting the way young Americans relate to one another, creating new avenues for living connected, vibrant lives that are less reliant on driving”.
The report is based on current data, and it supports several trends in The Great Reset.
Completing the summary of The Great Reset, the first Great Reset was in the 1870s, when the US transitioned from an agrarian economy to a manufacturing economy based on interchangeable parts. People moved from rural areas to cities. The second Great Reset was in the 1930s, when the US transitioned from small-scale manufacturing to large-scale manufacturing based on the assembly line, as pioneered by Henry Ford.
All three Great Resets had a major economic contraction during the transition. The old economy didn’t come back after the first two. Florida believes the old economy based on assembly-line manufacturing won’t come back this time. Just as he believes we should invest in the new economy instead of the old one.