M

From what I described in the past two days, you may come to realize our society would inevitably become M-shaped following the advance in technology. The middle class disappears. The wealth of the society as a whole increases, but you either become the crème de a crème  of the rich and get the lion’s share of the benefit, or you fall to the bottom and have to earn you subsistence by repelling jobs or social welfare.

But, there’s more. Once the society segregates into two layers and there’s nothing in between, the model of internal consumption (i.e. retail and service provision) changes accordingly. Expensive brands that make exquisite products prosper because there is a small elite group of people who could afford. At the other end of the spectrum, manufacturers of basic needs (for example, fast food and discount stores) continue to do well. Companies with a mediocre strategy in pricing, however, would not be able to sustain – because their customer group vanishes with time.

PS. Microscopically, another inadvertent problem of technological advance is the loss of opportunities for the young employees (for example, interns of hospitals or business firms) to have hands-on training by practising simple tasks – a problem that I referred to some time ago. (See http://ccszeto.blogspot.hk/2010/04/technology.html)