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February 12, 2008

The big picture

Everyday there is a new fact or figure about the economy that analysts dissect to see what it means for the direction of jobs, spending and other commercial measures. But aren't there some big forces always operating in the background of the economy that help determine the ultimate direction we're taking? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Yes there are, and I like to think of this as sort of a computer program that's operating in the background of your computer. It is always on. We may not see it, but it's actually very important. And I would argue there are three of these big forces.

"First is, I think, obvious to most people, and that is technology. And we see that mostly in terms of the computer. Technology has had a big impact on space, on speed, on the ability of people to make decisions, acquire information. It's really reduced the importance of being big. That is, even a small company can have access to, for example, information and decision making tools that a big company used to.

"The second big factor, I think, is deregulation and trade agreements. These really go together, and what they have done is, they've made our world more tied together economically. They've made our world more competitive and they are really changing where commerce is being done.

"And thirdly is the increased returns to education. Brains now win out over brawn. We need brain power to use the technology to compete in the world. For example, North Carolina can no longer compete on being a low-cost, low-skilled labor state like we used to in the early 20th century. And of course this has had big implications for our standard of living."

Posted by Dave at February 12, 2008 08:10 AM