The shift from the ‘old’ to a ‘new’ economy has had important implications for inequality. The ‘old’ economy firms that employed large armies of workers in plants scattered across swaths of territory and with massive supply and customer chains are being replaced by leaner firms. These new firms employ a fraction of a workforce increasingly concentrated in a few large urban agglomerations. Because ‘new’ economy firms interact directly with customers globally, their supply and customer chains are far weaker.
The inequality implications are plain to see. Far fewer workers and territories are reaping the lion’s share of benefits. Moreover, the demise of large supply chains and of low- and medium-tech plants in medium-sized cities, towns and rural areas is placing many formerly relatively prosperous areas in a development trap.
The ‘new’ economy model is thus creating an army of ‘left behind’, leading to a reaction against the system –through the support of populism at the ballot box or, increasingly, outright revolt– by individuals and places losing out from the shift in the model. It is as if the economy is adopting the characteristics of ether: more liquid, with a capacity to concentrate rapidly and evaporate into a ‘cloud’, and capable of combusting at low temperature.
ETHER aims to identify and explain at a fine geographical and comparative scale (Europe and US) the sources of discontent in this ethereal economy. This will imply a) explaining why many areas of the developed world are falling into a development trap; b) examining the link between the development trap and the rise of political discontent; and c) proposing evidence-based solutions for the rise of discontent.
In this process, ETHER will provide a wealth of new datasets, models, analysis, and policy strategies that will assist other researchers in tackling the development trap problem and decision-makers in making the most of the limited resources available for the development of places falling behind.
Funding scheme:
POS-ERC-Støtte til ERC søkere som oppnår god evaluering