In “Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States”, the book that won the prestigious Schumpeter prize in 2010, “sustainable well-being” economics is defined as the condition in which growth guarantees a stable level of employment and a equitable distribution of income. But which country in the world can satisfy it? Certainly not the United States, explains the author (William Lazonik, professor at MIT), even if the USA is paradoxically hegemonic in matters of innovation and research; capable of creating goods and services of higher quality and at lower prices than in past eras. The reason lies in the fact that the New Economy, founded on information technologies, unlike the Old Economy that preceded it, is unable to combine technological progress with widespread well-being.
The distinction does not concern the type of product, but the business model. The organizational model of the Old Economy rested firmly on the social figure of the white male, Protestant, graduate, employed with a good salary by a solid company, capable of reaching the top of the corporate hierarchy after 30-40 years of work; protected by a good medical insurance and secured by a secure and satisfactory pension. The New Economy has put an end to all this, not because complex and long-lasting organizations have disappeared: Intel, Microsoft and Cisco - to take the most significant cases - must always integrate the activity of tens of thousands of individuals within the framework of a functional division of labor that is able to make the most of new technologies and therefore require an organization based on a hierarchical structure.
The reason for the difference between the two models lies in the lack of commitment, explicit or implicit, on the part of these multinationals to offer employment stability, continuity in skills training and career progression. There is no longer, on the part of those hired, the expectation of climbing to the top of the hierarchical ladder within that company, because the new business model is based on the ability to compete in grabbing the best human capital that is globally gradually available. With employment becoming less stable and social security protection less secure, investment in financial assets directly, or indirectly through pension funds and insurance policies, by those who work in New Economy companies has become a pressing necessity , which in this type of economy is accompanied by the tendency to grant an increase in the remuneration of top managers in the form of stock options. It is clear then that in this world the increase in the value of shares is the primary objective to be achieved, in addition to having an abundance of young engineers, mathematicians, scientists and technicians willing to work more and for less salary.
And it is also clear that the instability of the values of financial assets brings with it insecurity, uncertainty and distortions in the distribution of income. According to this approach, "sustainable well-being", i.e. stable and equitable growth both for those working in high-tech industries and for those in other sectors, can only be achieved by abandoning that ideology based on share- holder value which has proven to be destructive of the social fabric and not to guarantee the well-being of a country over time.
