A healthy economy can always use more labor supply to increase the speed of production (as well as consumption), but no matter how hard we try, we cannot indefinitely increase our speed of learning a new skill, just as we cannot indefinitely increase our speed of running. In both learning and running, I think we have pretty much reached the limit of how fast we can go as a human being. In contrast, the speed of technological innovation can indefinitely increase because we can divide and conquer it. (Since each of us does not need to innovate to use it.)
And, the older we get, the slower we become at learning new skills. Because of this, I think our labor force is getting younger and younger. In the near future, we will reach a point where even young people wouldn’t be able to catch up with the speed of innovation. They would spend four years learning a skill, and it might be useful only for a few years after graduation, requiring them to go back to school and learn something entirely new because some technology would make their skill fundamentally irrelevant. At 25, they would feel old and obsolete.
This situation will eventually reach a point of absurdity where the colleges cannot teach their students fast enough, so by the time they graduate, what they learned would be obsolete. Now there is a trend to skip college and learn how to start a startup. I think it is motivated by this problem; the conventional colleges are too slow for the speed of innovation.
The current economy, even in the US, is very hungry for certain skills. The problem that many companies are facing is a short supply of new skills. If all of us can learn new skills in a month instead of four years, this innovation-hungry economy can easily employ us all. We need to think in terms of supply of skills, not labor. We have a short supply of relevant skills, and an oversupply of obsolete skills.
