Tuesday, July 12, 2011

Thomas Friedman's "The Start-Up of You": Why Unemployment Isn't Going Away Anytime Soon

In his latest New York Times op-ed "The Start-Up of You" (http://www.nytimes.com/2011/07/13/opinion/13friedman.html?ref=opinion), Thomas Friedman observes the rise in unemployment and opines that many of our children might have to invent, as opposed to find, their next job. Friedman writes:

"Look at the news these days from the most dynamic sector of the U.S. economy — Silicon Valley. Facebook is now valued near $100 billion, Twitter at $8 billion, Groupon at $30 billion, Zynga at $20 billion and LinkedIn at $8 billion. These are the fastest-growing Internet/social networking companies in the world, and here’s what’s scary: You could easily fit all their employees together into the 20,000 seats in Madison Square Garden, and still have room for grandma. They just don’t employ a lot of people, relative to their valuations, and while they’re all hiring today, they are largely looking for talented engineers."

I am in agreement with Friedman. In the past, I have written extensively about a small Israeli biotech company named Compugen, whose tiny team of perspicacious scientists is creating an expanding pipeline of therapeutic drug candidates based upon the company's leadership in algorithm-driven predictive biology, at a time when the pipelines of Big Pharma, whose R&D departments are staffed by thousands, are going dry. When it comes to hi-tech employees, I believe that quality, rather than numbers, dictates success.

What does this mean for our children? It is indeed a different world, and a Ph.D. without far-reaching vision, boundless creativity and adaptive flexibility no longer guarantees a job. There is little room for anything less than excellence, and this trend will only grow stronger with the passing of years.

Stated otherwise, unemployment could prove far more intractable in the future than anyone in Washington might imagine.

[As noted in prior blog entries, I am a Compugen shareholder, this blog entry is not a recommendation to buy or sell Compugen shares, and in mid-September 2009 I began work as a part-time external consultant to Compugen. The opinions expressed herein are mine and are based on publicly available information. This blog entry has not been authorized or approved by Compugen.]

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