The lamest cliche of our young century is undoubtedly the phrase, “We must build a work force for the knowledge economy of the 21st century.”
Like “a strong work ethic” and “a good day’s work for a good day’s pay,” it has become what I call fog talk — words that roll in from the mouths and reports of pundits, politicians and bureaucrats like mist across the beach on a cool morning. They’re painless and nearly imperceptible, but before you know it, they’ve obscured everything from sight.
What exactly is “the knowledge economy of the 21st century?” And how do we build a work force that is “ready” for it?
The best place to start, it occurs to me, is to ask a consultant. Not because she or he has any clear idea, but just to find out what he or she is doing.
Consultants, after all, are part of what the Census Bureau calls “professional, scientific and technical services.” It includes accounting, architectural, engineering and specialized design services, computer services, consulting, research, advertising, legal advice and representation, photography, translation and interpretation services and veterinary services. You name it, these guys do it. If anything is “knowledge-based,” this is it. And if Maine’s vaunted quality of place has any effective economic pull, it ought to work on these guys.
So how (and what) are they doing?
In the 2002 economic census, Maine had 3,275 establishments with employees that provided professional, scientific and technical services. They employed 21,917 workers, booked just over $2.25 billion in sales and paid just over $860 million in payroll.
2007, the number of these establishments had grown to 3,484. That amounted to a 6 percent increase, the 33rd fastest growth rate among all the states.
But while we were growing more enterprises, they weren’t adding many jobs. Their employment grew by just 1 percent in those five years, ranking Maine 42nd among the states. And their sales grew by just 29 percent — far less than the national average of 41 percent — ranking Maine 43rd among states.
In short, we’re doing pretty well at forming new “knowledge-based” businesses, but we’re not doing so well at growing them.
This pattern is even more evident in looking at what the census calls “non-employer establishments.” In 2007 in the professional, scientific and technical services “industry,” Maine had more than 13,000 one-man (and one-woman) bands, that is, sole proprietors who had no employees. These enterprises made sales of over $433 million.
way of comparison, that’s a sales value 50 percent greater than the total value of commercial lobster landings in 2007.
In Maine we had 3.75 of these “one-person” bands for every “knowledge-based” establishment that did report employees. This ratio was well above the national average, ranking Maine 11th among all the states.
These independent knowledge professionals don’t appear to be getting rich. Their average sales in 2007 amounted to just over $33,000. This was substantially less than the national average for sole proprietors in the industry — just over $43,000 — and well below the average pay in firms that do have employees — $49,000 in Maine and $64,000 for the nation as a whole. Nonetheless, these entrepreneurs do give new meaning to the old Maine tradition of “making do.”
And, more importantly, whatever it is they’re doing seems to be serving a growing demand and is certainly well-suited to Maine’s rural and increasingly elderly population.
The single greatest challenge facing Maine today is demographic. Over the next 20 years, our 65+ population will increase over 80 percent, while our population age 20 to 29 will decrease by nearly 30 percent.
If we are to avoid the stagnation and poverty of a population entirely dependent on transfer payments coming from an ever-declining working-age cohort, we need to increase ways for the elderly to remain in the labor market — even, or perhaps especially, part-time.
Can there be any better way to do this than by helping them become the next kitchen-table consultant — or, better yet, the first employee of the one next door?
Charles Lawton is senior economist for Planning Decisions, a public policy research firm. He can be reached at: