If you have not yet read Part I: We're Living Through a Rare Economic Transformation, available free to all readers, please click here to read it first.

In Part I, we reviewed the basic structure of what author Peter Drucker termed the post-capitalist society, a knowledge economy based on a model of decentralized, perpetually innovating organizations.

In Part II, we ask: How do we turn these structural insights to our own advantage?

Structural Inequality

I want to start with the social-political-economic divide that is endemic to the knowledge economy: the widening gap between the class of knowledge workers, which Drucker understood would be the smaller of the two classes, and service workers.

In broad brush, those workers and enterprises engaged in sectors that generate most of the wealth creation will do much better financially than those engaged in low-margin sectors.  In the knowledge economy, those with high-level, specialized skills will create more value and thus be better compensated than those with generalized knowledge and/or lower-level skills.

A fast-food worker, for example, is the modern-day assembly-line worker.  The entire process of assembling and serving fast food is highly organized for speed and efficiency.  But since the product is not high-value, the workers cannot be highly compensated for this work.

As Drucker recognized, all work requires management, and all organizations need to learn to innovate.  This creates opportunities for highly trained, specialized workers and managers, but it doesn’t do away with service jobs, which will remain more numerous than knowledge-intensive jobs.

This leads to a sobering conclusion:  Just producing more highly educated workers does not create a demand for those workers’ skills…