Win Some, Lose Some – It’s Not All the Same for Us

The 21st century started with the transubstantiation of the economic structure in the advanced world. Albeit the growing importance of services was already quite clear in the 1960s, modern services soared right after the revolution of information and communication technologies (ICT) from to the midst of 1970s.
Importantly, the emerging new services economies, in which 60-80% of GNI stems from services, are pervaded by the ‘servitising the product’ phenomena when adding services to the product offerings has also become a less-trumpeted, but secular factor in the new era of economic structure. In this way, increasing cutomers’ loyalty by providing them more emotional pleasures gained momentum. Undoubtedly, the shift to services economies requires very much different learning skills to maintain the creativity and more subtle innovation over the decades (i.e. computer literacy, engineers of computer technology and ICT tools have been appreciating). The so-called knowledge economies are therefore here to stay in which the generation and usefulness of new and relevant knowledge have been appreciating, not to mention the ability of people to frequently renew their knowledge basis (i.e. in the field of informatics, what was learned 2 years ago is now ancient history).
But, the old saying of „win some, lose some” still holds. Those people that were able and willing to rework their mindset to obtain anew skills, to take a big leap and move to other places were the temporary winners of the game. It also true that we got into a chapter of modern socio-economic development, in which the added value of slavish imitation of other innovations and solutions has lost its momentum because consumers need better services and products that are often tailor-made and co-designed. It implies that creative thinkers are required in old sectors to go beyond the wall of the past routines. This is why big players of businesses having stimulating and innovation-tailored atmosphere started to siphoning away innovative young students, graduates from certain places bounded with old industries (e.g. as Enrico Moretti demonstrated, Detroit is emptying and innovative workers have been moving to San Francisco, Durham, or to Austin etc.).
We have to candidly admit that development in one place (certain cities or regions) always have the negative repercussions to other places. As the prominent social scientist, one of the greatest Freiburg school economist, Wilhelm Röpke once emphasised: we cannot fill a hole without creating another one elsewhere. In global perspectives, such remarkable and observable changes can be noticed in the flow of refugees and immigrants from the African continent to Europe that offers them more opportunities to achieve a certain level of living standard, but, of course, such trend can also be recognised by looking at cities that have been „emptying” for decades while other growth poles rise.
Silicon Valley in the United States, as one of the most famous growth pole, can be seen as a prime example of development and decay. The Baltimore- incident of 2015 calls for concerted efforts to dampen the decay process of certain big cities that have been losing their most innovative and creative workers and where workers – not having modern ICT skills, but old-fashioned working skills – remain and not necessarily wait for future opportunities and promises.
It is hardly by chance that if one looks at the composition of workforce in big companies settled down in the Silicon Valley, it can be noted that only a very infinitesimal proportion of black people is represented in those companies.
Chart 1. Overall diversity of workforce in the Silicon Valley
A potential lesson might be that sustained growth depends on our ability to tackle the complex interplay and interactions of various phenomena. This is why getting a more systemic understanding when supporting regional development can be ranked with the group of some of the thorniest challengess of nowadays.