Tesla’s stock price hit a record high of $400 per share on the day President Donald Trump was impeached and climbed to $420 on Monday. However uncorrelated these events are, they encapsulate the American divide. Half of the U.S. passionately aligns with the president’s retrospective focus of making America great again. Juxtaposed against his vision is the American consumer’s embrace of disruptive technology. Voting with their pocketbooks, U.S. consumers have embraced companies like Amazon, Google, Tesla, Facebook, Netflix and Apple that are reshaping how we are employed, where we are employed, what we buy and who we buy from.
The obvious question is: How will the U.S. reconcile hopes for the return of the Industrial Age glory days with consumers' accelerating adoption of Information Age technologies?
Behavioral economics uses psychology and economics in studying how people respond to economic signals like prices, wages and taxes. Classical economics assumes people and markets are rational. Behavioral economics questions this assumption of rationality.
For example, why are Americans buying gas-guzzling, full-sized trucks and sport utility vehicles in record numbers? It seems irrational for Americans, who on average earn $50,000 per year with half not earning an annual wage increase, to be paying an average $40,000 for their trucks. It is irrational that these gas-guzzlers are selling at record levels when 70 percent of Americans accept that climate change is real, manmade, and will someday harm them or their property.
The answer lies in the human emotions of lust, love, fear, pain, optimism and pride. Behavioral economies recognizes that people predominately buy commodities based on rational economic principals because consumers have little emotional connection to an electron or a molecule of gasoline. But in terms of buying something like a pick-up truck, behavioral economics looks beyond rational economics to appreciate that consumers are a caldron of value and values where reason is overwhelmed by a sense of pride from being “Ford tough.”
The combined power of behavioral economics and disruptive technologies are major reasons why America is so divided. Disruptive technologies divide us with individually targeted inflammatory messaging at the same time they delight us with individually targeted online shopping promotions.
Disruptive technologies have divided us between those who are angry or fearful over job losses and those of us benefiting from working for, or investing in, disruptive technology companies.
We are now physically split into two communities, often in the same town. One community’s embrace of disruptive technologies has generated wealth and opportunity. The other community’s attempt to hold onto Industrial Age technologies has diminished their future and potentially their livelihoods.
But there is hope. However painfully and unevenly, U.S. consumers are embracing the disruptive technologies that will unite us around their ability to deliver cost-less, mean-more solutions.
Cost less, mean more is the formula for economic success. This economic formula displaced the horse with motorized vehicles. It is displacing cable television with Internet streaming, despite oligopoly or monopoly barriers. More meaningfully, it is the driving force behind the mass-market emergence of significantly disruptive product solutions like competitively priced, meatless hamburgers that are healthy, tasty and lower in environmental impacts—or electric cars that are faster, cheaper to operate and maintain, and come with zero tailpipe emissions.
The U.S. is just entering the mass adoption phase where disruptive technologies will deliver cost-less, mean-more solutions across today’s divided American communities. 3D-printed houses are on an economies-of-scale path for delivering affordable housing at a revolutionary $10 to $20 per square foot. Autonomously driven electric vehicles will move from pilot programs to economies of scale over the next 10 years, slashing consumer costs and climate changing emissions. The sale of plant-based meat technology in fast-food restaurants is a first step toward a food revolution that can solve our national obesity epidemic while also reducing the environmental footprint of the agriculture sector.
All of these disruptive technology industries have the potential to generate massive numbers of new jobs that millennials and the Gen Z generation will harvest with their digital aptitude.
As painful as today’s divided America feels, we are on a reunification path. We will know we are reunited when disruptive technologies no longer feel disruptive. At that point, the overwhelming majority of us will be saving money, making money and living healthier lives. Before long, we may find ourselves delighted by what used to divide us.
Image credit: Alex Blăjan and Banter Snaps via Unsplash
Bill Roth is a cleantech business pioneer having led teams that developed the first hydrogen fueled Prius and a utility scale, non-thermal solar power plant. Using his CEO and senior officer experiences, Roth has coached hundreds of CEOs and business owners on how to develop and implement projects that win customers and cut costs while reducing environmental impacts. As a professional economist, Roth has written numerous books including his best selling The Secret Green Sauce (available on Amazon) that profiles proven sustainable best practices in pricing, marketing and operations. His most recent book, The Boomer Generation Diet (available on Amazon) profiles his humorous personal story on how he used sustainable best practices to lose 40 pounds and still enjoy Happy Hour!