Last week's message looked at the value of time. This message looks at how to make money by looking for reducers of time and space. Innovation's erosion of time and space affects our investing. I have written often about how the economic evolution outlined by Austrian economist, Joseph Schumpeter, shows how innovation created industrial revolutions that alter the way we live, work and earn and keep money. Each shortened our dimensions of time and space through five great economic eras that began in the late 1700s:
ERA #1: 1785-1845-fueled by water power-60 years. Textiles and iron works were the backbone of growth industries.
ERA #2: 1845-1900-fueled by steam-55 years. Railways and steel provided the main growth in this era.
ERA #3: 1900-1950-fueled by the internal engine-50 years. Electricity and chemicals provided the major growth.
ERA #4: 1950-1990-fueled by electronics-40 years. Petrochemicals and aviation were the innovations which became mainstream in this period
ERA #5: 1990-current-fueled by digital networks- 30 years+ ? Software and new media create the growth elements in this era.
The innovation that has led us to this current era allows us to increase our wealth and fulfillment in life at the same time by developing a Primary Income Earning Capacity, (PIEC). PIECS allow us to make money and feel better by looking within to find ways of turning our passions into wealth. All of this innovation means we are in a continual state of turmoil and change. We have to work harder and look deeper to keep up, but the world is open to anyone who wishes to have riches beyond belief. The wealthiest billionaires of today were unknown just a decade or two ago. They have made incredible wealth in industries that have only existed for a few years. This innovation empowers the individual! Today we have faster and faster computers, the Internet, the information access. All this allows you, me, anyone to be incredibly efficient, anywhere in the world! All this allows us to identify and reach markets very easily.
Everything is about to change yet again! The billionaires of today are likely to be the has beens of tomorrow and this is happening sooner than anyone can imagine. Never before has an old boys' network been overturned so fast. The railway and oil magnates of the first and second era dominated the world's wealth for centuries. Electronics, car and airline multimillionaires lasted perhaps 50 years. The Internet and communications wealth will be overshadowed in as little as a decade.
Add this all up. Change. Access to markets and information. Ability to plan, organize and sell. Anyone can take advantage of these new opportunities as times change. To spot the best ways to make money in the future, look for innovations that truly alter the way we deal with space and time in large or small ways.
Until next message may your time be prime!