You Didn’t Study Economic History in School? No Problem: Here’s a Quick 10,000-year Summary

This history of the economy in many ways is quite simple. The numbers below are approximates and a bit of a mash up taken from several sources to illustrate trends and shifts in our economy.
Here’s a brief 10,000 year summary of the economy in North America and to a certain degrees the Western Hemisphere. Since the dawn of civilization, there have been three drivers of wealth and job creation in the economy. The Agrarian Age, The Industrial Age and now the Creative Age.

The Agrarian Age

For the first 10,000 years of civilization employment and wealth creation was primarily tied to agriculture. At the turn of the 20th century roughly 60% of the labor force was directly or indirectly tied to Agriculture – as a result of innovation, shifts in the economy, the industrialization of agriculture, mechanization and productivity gains that number is now is just below to 2%. This snapshot occurred during the transition from the Agrarian Age to the Industrial Age.

The Industrial Age

By the mid 20th century the tides had shifted. Just as the labor force had peaked at 60% during the Agrarian Age, approximately 50% of the labor force was employed in manufacturing during the Industrial Age, currently that number is just below to 12% due to the recession, automation, global shifts, labor costs and off shoring! This snapshot occurred during the transition from the Industrial Age to the Creative Age.

The Creative Age

Today employment in the Creative Age is approximately 35% where it was only 5% at the turn of the 20th Century. In other words people who are paid to think represent 35% percent of the labor force. Creative class jobs are expected to grow by about 40% over the next decade or so.

Shifting Trends

As we moved from the Agrarian Age to the Industrial Age employment growth and and wealth creation shifted from one to the other, now we are seeing a similar shift again. If we want to see our communities prosper, we need to make sure we are focused on future economic growth opportunities versus ones from the past. The previous wealth drivers don’t disappear they just diminish in their importance and contribution to wealth creation and employment, while making room for new ones.

Crystal Ball?

In a recent talk I gave, I asked people to imagine that we were at the end of the agrarian age and the beginning of the industrial age and we could choose to invest further in a building a better buggy or a building a new buggy – the automobile. If you invested in the better buggy you would been out of buisness, if you invested in the automobile you would have been as wealthy as Detroit was at its peak mid 20th Century.

We are now in the same cross hairs of time. We are at the end of the industrial age and the beginning of the creative age. If you are building an economy and community are you going to bet that industrial based manufacturing is going to carry the day or that knowledge, innovation and technology driven companies is where the future economy is heading. We have a bit of a crystal ball here. I don’t know about you but I am betting on the future not the past! Look what happened to Detroit they missed the shifting trends and are still paying for it today vs. Silicon Valley who is still capitalized on the shifting trends.

~ Dan Taylor