The new savior of the middle class: big oil or big data?
The Wall Street Journal reported today that the Energy Information Administration is predicting another milestone on the path to North American energy independence, saying United States oil demand will increase only slightly in the next few years while output grows rapidly. CNBC reported that U.S. oil production topped seven million barrels per day for the first time since March, 1993, and is nearly 20 percent above the amount produced at this time last year.
The WSJ also said U.S. oil imports will reach their lowest level in 25 years by 2014, citing a Financial Times report. Most proponents of big oil and some who are simply pro-middle class feel that this is great news for the economy, jobs and for that middle class. Economically speaking, few would argue with that.
However, French Caldwell, vice president and Gartner Fellow at Gartner Research, asks whether it would be big oil or big data that would save American manufacturing, and thus the middle class.
Caldwell says it depends on what you might see as the fundamental economic problem facing the U.S., citing George Friedman's piece this week in on the crisis of the American middle class, in which a clear difference is made between economic gains and the prosperity--or lack of it--for the middle class.
Friedman says the application of big data to manufacturing and supply chains can make American manufacturing more competitive and save jobs, but it also automates and improves productivity, which eliminates jobs. Lower and more stable energy costs, on the other hand, also have a direct impact on the bottom line, and laid out his case for big oil.
Caldwell said off-shoring has already been hit by higher wages in developing economies, and now that the U.S. has a competitive differentiator on energy costs, data processing and storage could shift back to the U.S. as well.
He thinks there could be a synergistic relationship between big oil and big data, which could drive gains in productivity and innovation.
For a more thorough exploration on big oil and big data, see Caldwell's column.