By John Eberhard

(Note: I recently sent out this article in my marketing newsletter, then realized it is just as valid as a political commentary.)

This article is going to be a bit different than most of my Internet marketing articles. This one is more about economics.

Back in August I traveled to Cleveland, Ohio, where I grew up, to spend a few days visiting with my father who was 92 years old and whose health was failing. In the past few days I visited Cleveland again to pay my final respects.

During the first trip in August I drove around my old stomping groundswhere we lived when I was younger on the east side of Cleveland, and then where we lived when I was in junior high and high school on the west side.

I was struck, particularly on the west side, with how economically depressed the area seemed. The houses still seemed well maintained, but many of the businesses were vacant and the area had the feel of a ghost town. It was starkly different from when I grew up there, and starkly different from where I live now in Los Angeles, which seems more active and vibrant economically.

Of course I know that the U.S. and the world really is in a major recession. So businesses are hurting everywhere. But the west side of Cleveland seemed particularly hard hit.

What caused this major shift, with Cleveland being listed as one of the most economically depressed cities in the U.S.? And what do they need to do to come out of it?

The Third Wave

So now I’m going to get all philosophical and intellectual on you (you’ve been warned). A few years ago I read a book called “The Third Wave” by Alvin Toffler, the author of Future Shock. In the book Toffler discussed what he characterized as the “third wave,” basically the information age or the computer age, with the first wave having been the agricultural age and the second wave being the industrial age.

One of the aspects of the information age which Toffler described was that different countries entered each of these ages at different times. So countries like the U.S. and the UK and other European countries that had entered the industrial age relatively early on, were now leading the way into the information age. And another aspect of this was that previously undeveloped countries were now entering the industrial age.

What I realized from this was that in the 21st century, there would be a sort of division of labor between countries. Previously second or third world countries, as they entered the industrial age, would now become the centers of heavy industry for the world, handling things like steel production. And early industrial countries like the U.S. would now lead the way with information products, like computers and software and high tech.

Following this line of reasoning, you could look at previously heavy industrial areas like Cleveland and Detroit, and where heavy industry had left, you’d be pretty certain that they weren’t going to come back again.

When I was a kid Cleveland had been a heavy steel and auto production town. Many of my friends’ fathers worked in the steel mills. Now those mills are gone. In fact, there is a big shopping mall there where the big steel mill used to be.

Now we could argue about what caused the steel factories to leave, and maybe it was the unions, and I’ve heard people argue that it is bad that we now get most of our steel from Korea. And we could look at how the unions have affected the big U.S. car companies and how they have all been in or close to bankruptcy.

And I’ve heard people argue that it is bad that we now depend on other countries for certain products, and that we as a country need to be self contained and totally self sufficient and produce everything we need.

While I do agree that the U.S. needs to be more energy self sufficient, I do not feel we are ever going to get the toothpaste back in the tube when it comes to heavy industry leaving the United States. Many of these other countries have lower wage levels and it makes sense business wise to have them do the manual labor, industrial type jobs.

So where does that leave the U.S.? And where does that leave Cleveland? And what do businesses in Cleveland need to do to get back to vibrant condition?

Well what Cleveland needs is the same thing that any other city needs. And what businesses in Cleveland need to do is the same as what businesses everywhere need to do:

  1. Accept that we are in a new age, an age where the U.S. is and will be dominated by information or technology oriented products and businesses.
  2. Innovate new products and services in the information or technology sector. Become the next Steve Jobs in your particular niche.
  3. Work hard and deliver good service.
  4. Market your better mouse trap aggressively so the world knows about it and can buy it (you were wondering when I was going to mention the word “marketing,” weren’t you?)

I think if we all do that, Cleveland, and the whole U.S., can get things going again and get back to the financial prosperity and vibrancy that we all desire.

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