The Future Economic Consequences of Commoditization

Ryan, John and Holmes, Andrew (2009): The Future Economic Consequences of Commoditization.

Abstract

Predicting the future is an imprecise science, and something that should always be carried out carefully and the results should be taken with a pinch of salt. That said it is sensible to assume that most of the drivers of commoditization are likely to remain in force for the foreseeable future. Unlike the futurologists who attempt to predict how society and technology will change over the next fifty years, we are only going to look a few years ahead, which is a more sensible time horizon. History is not always a good predictor of the future, but in the case of commoditization we think it is. It is clear that when we look back in time we can see how the process of commoditization has subsumed great tranches of industry, eliminated significant numbers of manual labourers and increased the general efficiency and effectiveness of society. In many respects we could argue that it was important to the advancement of the industrialised economies of the West. In projecting forward from this point, we should expect commoditization to continue to expand its footprint into areas which we currently think are outside of the realms of possibility. After all, no one would have expected the IT industry to have become so commoditized when it first emerged during the 1940s. And in the same way that white collar workers were caught out when they believed they were immune from the initial waves of downsizing and offshoring that affected the manufacturing sector, others at the mid- and high-end of the workforce may also be caught out sometime in the future. And as commoditization continues to advance it will touch on many more peoples’ lives and livelihoods.

• Item Type: MPRA Paper
• Language: English
• Keywords: Commoditization, Offshoring, Talent, Technology, Competition, Inequality
• Subjects: D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior ; Transaction Costs ; Property Rights; D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; F - International Economics > F0 - General > F02 - International Economic Order and Integration; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D40 - General; A - General Economics and Teaching > A1 - General Economics > A10 - General; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

References

Betancourt, M., (2004) Labour/Commodity/Automation A response to “The digital death rattle of the American middle class: a cautionary tale, ctheory.net

Birchall, J., (2006) Democrat leaders join fight against Wal-Mart, Financial Times, November 15,

Bianco, A., (2006) The bully of Bentonville, (New York: Currency Doubleday).

Bolchover, D., (2005) The living dead, (Chichester: Capstone)

Bosshart, D., (2007), Cheap? The real cost of living in a low price, low wage world, (London: Kogan Page)

Brown, P., et al (2006), towards a high-skilled, low-waged economy? A review of global trends in education, employment and the labour market, in Porter, S., and Campbell, M., (eds) Skills and economic performance, (London: Caspian Publishing)

Browne, A., (2006) No school, no job for record numbers, The Times, December 11

Canton, J., (2006), The Extreme Future, (New York: Dutton)

Frank, R., (2007), Falling behind: how rising inequality harms the middle class, (Berkeley: University of California Press 7)

Hacker, J., (2006), The great risk shift, (Oxford: Oxford University Press)

Hewlett, S., and Buck Luce, C., (2006) Extreme jobs: The dangerous allure of the 70-hour workweek, Harvard Business Review, December

James, O., (2007), Affluenza, (London: Random House)

OECD (2007), Employment outlook

Parsons, S., (2007), Children are right to ignore their prescribed futures, The Times, July 5

Ryan, J., (2006) Wal-Mart and China: Boon or bane for American interests, European Business School occasional & working paper series, no. 3