This chart, from Carlota Perez, shows how wrong it is to pursue a defensive economic policy in the face of a technological revolution—i.e. to respond to technological disruption by trying to defend the industries that are being disrupted.
The chart show employment in America by sector from the 1920s to the 1960s. It shows how the postwar golden age created massive numbers of new jobs even while employment in manufacturing stagnated. Imagine responding to this trend by doubling down on your commitment to manufacturing – the blue. That is precisely the wrong approach. It’s like noticing the California gold rush and then rushing east.
The state today should be doing the opposite: helping people (individuals, society, political institutions, regulators, schools, etc, etc.) to transition as quickly and smoothly as possible into growth sectors in the new technological paradigm: non-traded services, digital technologies, etc., etc.