Free The Future of Success by Robert B. Reich Page A

enjoying lower costs and better values.
    The trend must not be overstated. There remain many sectors of the economy where large-scale production still prevails. Efficiencies of production scale will probably never entirely disappear. Innovation is occurring most rapidly where technologies are giving customers the widest choices and easiest means of switching to better deals: in entertainment, finance, new media, software, and Internet-based communications. Not incidentally, these also are the fastest-growing sectors of the economy. But others are also changing. Much of the retail sector is about to be transformed by the Internet. Old, heavy industries like autos, chemicals, and steel are shifting from high volume to more customized products and using Web-based business-to-business auctions to find the best suppliers. Construction, health care, publishing, and education (including higher education) remain far removed from the cutting edges of innovation.
    You are also cautioned against confusing the longer-term trend I’m describing with the expansionary phase of a business cycle or with gains in the stock market. At this writing, the American economy has experienced the longest expansion in history, according to available historical data, and stock-market values are still high. By the time you read this, the expansion may have ended and the stock market may have corrected itself with a bruising thud. But the underlying structural trend discussed in these pages is likely to continue nonetheless. It depends less on overall levels of supply and demand, or on the exuberance of investors, than on technological innovation.
    To the extent that technology is destiny, the spirit of innovation will eventually extend throughout the entire American economy, and to other economies around the world. This is unambiguously good news for every buyer who seeks a better deal. But the news is more ambiguous for other aspects of our lives, as we shall see. And although technology is setting the pace, our destiny is not beyond our control.

CHAPTER THREE
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Of Geeks and Shrinks
    R ECENTLY I received an e-mail from a former student who’s working for a small company in New York. She’s devising games that thousands of people can play with one another simultaneously over the Internet. “I’m spending six hours a day coming up with new ideas and twelve hours selling them,” she wrote. “Cool stuff! And with my stock options, at the rate things are going, I’ll be a multimillionaire in three years! Best to you!”
    My former student may well be disappointed three years from now. But undoubtedly the demand for creative and innovative people like her is growing because of the increasing importance of innovation to the economy. Enterprises whose members discover the most imaginative possibilities, for which there’s the greatest demand, generate the highest profits—at least until rivals catch up. Their brand-portals inspire the most trust. They are likely to be the “stickiest.” And the people who contribute the most to them have (or have a shot at) the most lucrative and often the most interesting jobs found anywhere.
    The demand for creative innovators continues to exceed their supply. As buyers switch more easily to better deals, competition is spreading and intensifying. Innovation is occurring in more places, among more products, inside more organizations. And wherever it occurs, it creates the competitive necessity among rivals to innovate as well. The supply of creative innovators, in other words, ignites still more demand for them. And as the demand for them grows, their economic rewards grow in tandem, because the supply can’t keep up. 1 My former student, and legions of twenty- and thirtysomethings like her, are the direct and immediate beneficiaries.
    There is a common misperception that today’s innovators are particularly adept at using new information technologies, especially computers. I may have inadvertently contributed