Supply Chain Revolution: How a 3-D Supply Chain Could Create Many New Jobs and Revitalize the Economy

(repost from the Huffington Post, December 12, 2012)

By Luke Ho-Hyung Lee and Jess Parmer

Extreme risk aversion continues to oppress the economy, and recovery is very slow.  Perhaps it is time for a new take on what was wrong in the first place.  Maybe all this mayhem owed less to financial disruption than is widely believed.

Our 2-D Private Supply Chain Process Is a Nineteenth-Century Relic

Since linear supply systems were developed between suppliers and customers at the beginning of the Industrial Age, each supplier has had to construct its own supply chain network.  This established two-dimensionally networked (2-D) supply chains in the overall market–a framework which has not changed, even under the modern information revolution.  We call for an innovative approach, a supply system that possesses a third dimension, and is public as well.

The advent of advanced information technology forced suppliers in almost all industries to develop their own electronic supply chain networks, at great cost, significantly reducing the number of competitors in supply chains and increasing the efficiency of each function (for example, logistics or warehousing) through consolidation.  Because of the superior market position of big suppliers and service providers with their private supply chain networks and fast delivery speeds, businesses which couldn’t afford such networks have weakened and over time been destroyed, and this is how many jobs disappeared.  But the overall effect was that the 2-D supply chain in real markets became unstable, and this contributed to the decline of jobs in the market as a whole, unavoidably and continuously. 

In this situation, the mantra for suppliers and service providers became, increase efficiency or die.  So, they aggressively adopted IT progress, off-shored and outsourced to lower-cost countries, and broadly adopted automation in the form of robots.  Accordingly, large corporations became job-killing machines.  These developments have contributed to the weakness and near collapse of the general services industry (such as auto parts and paint sundries) and have aggravated unemployment.

The existing 2-D supply chain process, focused only on efficiency, ignores human intelligence and imagination, and treats ordinary workers like machine parts, easily removed and replaced.  As a result, many full-time jobs have morphed into part-time jobs, and lower- and middle-skill workers have faced job erosion.

What then has happened to our efforts to generate higher growth and demand – and create jobs over the last four years?  Unfortunately, with the efficiency-driven 2-D supply chain, the Information Age has emerged at the expense of employment, policies aimed at raising employment are treading water, and capitalism’s regenerative office has been slow in reviving.  Abnormal economic phenomena--astronomical government budget deficits and extreme risk avoidance—have become salient.  It seems we have staved off financial collapse by creating more if not worse problems.  This is the capitalism of competition by size, and history has proven that it cannot solve its problems on its own.

Why Not Try a 3-D Supply Chain Process?

In limited ways, the electronic economy is doing just this:  the Internet serves as a 3-D hub or platform between multiple information sources and recipients.  But why haven’t we developed any such 3-D systems in U. S. supply chains, with strong operational feedback modules like Toyota’s?  Real markets in tradeable goods offer little prospect of righting themselves anytime soon.  This means that the disconnect between business needs and labor markets will continue without a lasting solution.

The authors have discovered the fact that our economy has erred in developing sophisticated technology-based transaction systems for supply chains over the last 30 years.  Oddly, the processes of real-world markets have not been considered at all in developing private systems, and constructing a fair rule and standard for the public has escaped attention.  Information technology has been misused from the start in developing such 2-D transaction board games.

The Supply Chain Revolution Is a 3-D Public Supply Chain System

We believe a new 3-D supply chain system could easily be developed with largely off-the-shelf technology to overcome restrictions of time and space in commerce by improving major real-world business processes in transaction systems.  A networked public supply chain infrastructure, bundled with third-party infrastructure for communication and peripheral networks, could quickly become available to all members of markets in tradeable goods. 

Under this new 3-D supply chain system, each business will have a competitive relationship with like businesses under fair conditions, and not simply by size.  In other words, a cooperative relationship will arise between a business and its nearby competitors.  This is far different from what we see today.  With these competitive-cooperative relationships, each business will be able to significantly increase its efficiency, productivity, and application capabilities—in a word, its overall market effectiveness.  3-D systems will be multiplicative, not merely additive, as with the 2-D supply chain model.  This will become a business revolution.

The 3-D supply chain system will arise with the voluntary participation of many SBEs and MBEs and their suppliers and service providers, with clarified responsibility lines, centralized volume, and mutually distributed expense.  Because this supply chain system connects the power of all participating members, each will benefit from the system’s size.  For example, competing convenience stores could insure themselves against theft, as opposed to paying some average price computed by an uncaring and locally unsophisticated insurance industry.  Numerous other applications could easily develop in real markets, based on imagination.  Human intelligence will re-emerge among the robots, as at Toyota, and the cascade of full-time jobs into part-time jobs will be reversed.  In effect, SBEs and MBEs will retake control of their own destinies.

Further, our proposed 3-D public supply chain system’s impact on SBE and MBE productivity, flexibility,  and delivery speed will draw operations of companies that have offshored and outsourced to lower labor cost countries back to the U.S. by lowering barriers to re-entry.  Accordingly, numerous new businesses and jobs will manifest in the market as a whole, and we can overcome American capitalism’s regeneration crisis and undertake economic revitalization on a realistic basis.    

Japan’s Lost Decades: Could They Happen in the U.S.?

(repost from the Huffington Post, Jan. 17, 2013)

By Luke Ho-Hyung Lee and Jess Parmer

When the Japanese economy prospered in the 1980s, every country in the world was envious.  But when Japan's Great Recession hit in 1990 with collapses in land and stock prices, people were surprised but immediately thought that it was just a correction in the regular economic cycle, and that Japan would resolve it soon.

The Japanese government and experts worldwide have tried to figure out the real cause for over 20 years, but to no avail.  Moreover, it seems the United States is following a similar path:  it doesn’t look as if it was only Japan’s problem any longer but every advanced economy’s problem.  What was wrong with Japan’s economy?  Why didn’t the remedies work?  Was the real cause of Japan’s Great Recession the same as that of the current world-wide economic crisis?  If this is so, why did Japan have it much earlier than elsewhere?

To answer these questions, let’s imagine a situation:  It is today well known that diabetic disease occurs either because the pancreas does not produce enough insulin, or because cells do not respond to the insulin that is produced, an overall body function failure.  Was there a market function failure something like diabetic disease in Japan’s economy?  That is, weren’t there several failed market functions, like a failing pancreas and failed cell functions?

I suggest you carefully examine Japan’s exclusive, privately owned supply chain networks.

These worked very well in the Industrial Age, with its limited number of products and services, by protecting Japan’s domestic industries, just as a healthy pancreas or robust body cells work well.  However, the market situation abruptly changed in the Modern information Age.  The number of products and services has increased explosively, and ways of doing business have become more complex.

Especially during the 1980s, Japan’s prosperous period, many Japanese companies developed new products and services and at the same time created supply chain networks for higher profit and greater efficiency.  That is, though more effectiveness-oriented activities (such as securing new customers) were required in its modern information-based market following the 1980s, only supply chain systems for efficiency-oriented activities developed and advanced in Japan.  So, its markets became much more efficiency-driven just at the moment when large efficiencies became hard to find.  And tooling up these electronic supply chains had cost a lot, while making lower prices and more jobs seem impossible, even silly, goals.

Due to this changed market environment, many Japanese companies off-shored or outsourced their manufacturing to lower labor-cost countries, mostly to China, and adopted full automation processes in their remaining domestic manufacturing.  The disease was to be cured by making all healthy customers go on a diet; easy money in the form of lower borrowing costs was to make this palatable.

In this situation, Japanese companies couldn’t expand their customer bases enough (or create enough jobs) to keep consumer spending at the desired level.  Profit maximization, rather than lower prices, was the irresistible reward; customer bases refused to grow.  That is, something like diabetic disease emerged in Japan’s economy.  Let’s call that something the Efficiency Disease. 

To keep the level of consumer spending up, Japan’s government adopted a series of excessive expansionary economic policies, and accordingly many abnormal phenomena were created and accumulated in the market -- and finally, the asset bubble burst in 1990.

Then, what caused the occurrence of the Efficiency Disease in Japan’s economy at that time?  Wasn’t it the failed function of Japan’s privately owned supply chain networks?  Clearly, they failed to effectively handle all market requirements in Japan’s changed economic situation in the Modern Information Age.  They were no longer suitable to Japan’s modern information-based market.

Nevertheless, strangely, Japan has never tried to treat its Efficiency Disease, that is, to fix its failed supply chain networks, over the last two decades of its Great Recession.  Many Japanese companies continue to develop advanced electronic supply networks.  It seems Japan has simply tried to solve its economic problems without knowing what was causing them, and has added to its problems with a series of ineffective economic policies and stimuli.

Ultimately, Japan is not an isolated case:  without being aware of the economic impacts, almost all Western countries, including the United States, have also developed massive private supply chain networks in their markets and have induced similar Efficiency Diseases in their economies.  At a minimum, a lost decade of growth will also be unavoidable in these countries.  

Strangely, even if it was possible with our advanced IT and networking capability, no open and public supply chain system as an electronic infrastructure has been developed at all--not a single one in the whole world!  This is the “tragic flaw” of the modern IT-based economy, and I strongly believe it is the real cause of Japan’s Great Recession -- and the current world-wide economic crisis as well.

Japan was like a rich man with a lot of savings, but it has spent too much over the last 20 years. The United States is still a reserve currency country, but its deficits pose a threat as the national debt becomes a serious issue for its economy.  

If this Great Recession persists for the next decade, what will happen to the U.S.?  The short answer:  “Catastrophe!”

Then, what should we do?

We should immediately replace our outdated, closed, and private supply chains with a new open and public electronic infrastructure that is better suited to modern IT-based markets.  I believe this is the most effective way to treat the Efficiency Disease in our markets and save our economy.

To suffer through a Lost Decade or to build effective economic revitalization – it depends on our choice.

After The Election: The Hidden Flaw Holding Back Full Recovery

By Luke Ho-Hyung Lee

Post-election America: it was a hard-fought campaign on both sides, but incumbent Pres. Barack Obama won with his message of “let's finish what we started.”

His next step domestically is tackling the "fiscal cliff" (with a compromise solution tied to a Grand Bargain... or not).

Moving ahead, new policies will be announced, and some cabinet changes made.  Obama's January inauguration will precede a measured economic recovery in 2013.

That’s the good news.

The bad news: this scenario might be as good as it gets.  The upcoming recovery won’t boost middle- and working-class households in a meaningful way.  It won't be a sustained, permanent fiscal recovery.

But this isn't necessarily the Obama administration’s fault.  Since the 2008 fiscal meltdown, government officials, policy experts, and financial gurus of all stripes and credibility levels have rolled out any number of ideas aimed at solving our continuing financial crisis and revitalizing the economy.

Little has worked so far.  The lack of significant job creation and its twin symptom of high unemployment, stagnant or dropping wages, stagnant or dropping worker productivity, decreased consumer spending and its twin symptom of increased household debt, and volatility in the housing market are all side effects of something much larger.

Policy makers are focused on the symptoms, not the problem.  The real problem is far more fundamental and systemic than a few leading economic indicators. 

And this fundamental problem is invisible to nearly everyone.

This unseen, and therefore unaddressed, problem means that an even bigger and longer-lasting crisis -- a true economic tsunami -- lies ahead for the world as a whole, not just the U. S.  Industries around the globe will continue to shed valued (and valuable) jobs, in turn harming consumer-driven economies and creating a self-sustaining downturn.

This downturn will continue until the world economy either "breaks" permanently -- or the fundamental problem is recognized and addressed.

At its heart, the flaw is our mistaking efficient markets as being effective markets and failing to recognize the significant and profound difference.

The solution starts with acknowledging that domestic manufacturing needs to be the backbone of any significant economic recovery. 

The "experts" will say, of course, that America doesn't "do" manufacturing anymore.  Our economy is all about service, finance, software, and entertainment. 

That's not strictly true, of course:  the auto industry is still a major player.  Just ask Ohio and Michigan. 

The fact manufacturing isn't considered a primary element of our economy is the big reveal of our fundamental problem.  We can encourage entrepreneurs, innovators, and inventors in any number of ways, but if the basic conversation assumes that new manufacturing at any significantly higher level would simply shift overseas -- we've been misled that job creation is and will be the primary direct benefit of American innovation and entrepreneurship.

"Job-Killing Machines" in the Modern Information Age

But this is the case now, and it's because over the last 20 to 30 years of the Information Age, we have shifted our “real market” process (basically, the physical supply chain process) to a more efficiency-oriented supply-side environment.

This shift essentially created numerous domestic "job-killing machines," as large firms focused on efficiency and profitability generated by information technology and advanced networking systems. This altered the whole economic environment, making the destruction of jobs a major result of this efficient, "intelligent" streamlined process.

Isn't efficiency good for the economy?  In a balance-sheet recession, no.

Here’s why:

Think of the manufacturing and supply chain network – from product manufacturer to distributor to retailer and finally to the consumer – as a long stretch of highway, leading from the countryside, through the mountains via tunnel, over a bridge spanning a river, and into a city.  The highway passes a variety of buildings, ultimately leading to a retail store. The companies in these buildings are members, whether they can afford it or not, of this highway "network."  The network is the connected supply chain.

The highway, tunnel, and bridge are all well designed and maintained. It's an example we can see over and over in the U. S. and other nations. 

In this specific case, however, imagine that the highway, tunnel, and bridge are privately owned.  The companies located along the highway are part of the same conglomerate.  Moreover, the owners aren’t AT ALL interested in opening this transportation system to the public – not even to collect tolls.  They simply want the highway-tunnel-bridge system for their own, private use because of its competitive advantage.

That’s a major problem, and unlikely to happen in any rationally run country. Right?

Wrong.  The same thing is happening throughout our economy, but in less obvious ways. 

Example: A Private Information-Based Supply Chain Network 

Let's look at just one example:  Zara, the world’s largest clothing retailer, has developed a private IT-based supply chain network that vertically integrates its logistics and collaborative functions.

The Arteixo, Spain-based firm’s network is so efficient it now needs just two weeks to develop a new product and get it onto its stores' shelves -- compared to a six-month industry average.

This competitive advantage lets Zara launch around 10,000 new designs each year, far more than its competition.  By one measure, Zara has been remarkably successful:  Bloomberg Markets named Chairman Amancio Ortega the third richest person in the world this year.

What happened to other players in the industry?  Most smaller designers, manufacturers, and retailers are far less competitive (or efficient) than Zara.  A few lucky groups (including suppliers, designers and distributors) were brought into Zara’s system. 

Because of the resources pulled into Zara's closed network, combined with the chain's cost efficiencies, the larger fashion retailing industry’s supply chain became seriously unstable.  Most other companies lost their businesses.

As a result, jobs for middle- and lower-income workers in this industry have continually and relentlessly decreased. 

And Zara is in no way an isolated case:  due to the superior position of large companies with their own private, highly efficient supply chain networks (think Wal-Mart), small- and medium-size companies worldwide have likewise seen their businesses weakened and often destroyed.

Jobs in those smaller companies also have been lost – and they haven’t been replaced in anything resembling equal numbers by the larger firms.

There are three primary reasons why jobs replacement isn’t happening: 

(1) the aggressive adoption of IT systems that can identify redundancies (eliminating similar positions within the domestic marketplace),  (2) off-shoring and outsourcing manufacturing to lower labor-cost countries (shifting jobs out of the domestic market), and  (3) broad adoption of robotic machines and automation processes (eliminating jobs from entire industries, period).

This is strongly correlated with the decline of the self-generation, or recovery/rebuilding, capability of the economy (and once again illustrating why Henry Ford paid premium wages to his workers: he wanted them as customers).  But the workers impoverished by Zara cannot afford even its cheaper goods. 

These private information-based supply chain networks have been the major job-killing machines in the modern Information Age.  This is competition by relative size.

Competition Through “Public” Supply Chain Networks

As to our current supply-chain networks, we can say that while these private networks are efficient, they aren’t -- in terms of larger economic priorities -- in any way effective. 

These winner-take-all closed, efficient systems harm larger economic goals and objectives because they eliminate jobs as part of their natural process.

An open, effective supply chain network would allow network members to take advantage of efficiencies of scale and information systems, while reducing the advantages of size alone.

An open, public supply-chain infrastructure would shift the emphasis from only cost-per-unit to competition by price, quality, and service, that is, absolute competition.

The existing efficiency-oriented mass production process and mass-market consumption model would be altered into a more effectiveness-oriented, diversified, or individualized production and consumption system. 

In our example of the private highway-tunnel-bridge system, the owners can keep their closed network. But we’re going to build a toll-based system nearby, open to whoever can pay the reasonable fee. 

This open, membership-based system means a broad range of businesses -- low-tech to high-tech and everything in between -- can benefit from shared, intelligent manufacturing and distribution networks. 

A public system will spark business growth and lower the cost of entry into any number of domestic markets. 

Owing to these changes, local employment conditions will improve considerably, and the business environment for middle- and small-sized companies and for the general service industry will ease significantly. 

Moreover, companies that off-shored and outsourced to lower labor-cost countries would come back to the domestic arena.

The (Open, Public, Membership-based) Road Ahead 

This synergy for employment would be a positive force for economic recovery and revitalization.  The improvement of the self-generation capability of the market could finally be transformed into a permanent structural force to steady, and then increase, the level of consumer spending. 

It's only when we're ready to discuss the realities of manufacturing's role in our domestic economic future -- and the advantages of an open system to foster innovation, production and distribution -- that we can also discuss the realities of a sustained, and sustainable, economic recovery.

-------------------

About the Author: 

Ho-Hyung (“Luke”) Lee (luke.h.lee@ubims.com) is the founder and CEO of UBIMS, Inc. ("Ubiquitous Market System") He's by training a lawyer, an international businessman and entrepreneur – and an inventor.  Lee has figured a clear way out of the current economic crisis and developed the modern world's first Public Information-Based Supply Chain Infrastructure - UBIMS Inc. 

  

UBIMS Changes Supply Chain Quality

                                  by Jess Parmer

We have stressed on this blog over the last few years the price and competitive improvements that will result from adoption of the UBIMS platform by end-user businesses and suppliers.  In capsule form, these improvements result from UBIMS’s direct assault on time and space constraints imposed by private supply chains in the service of ultra-large job-killing machines in our domestic economy, and in the world at large.  End-users—not limited to local retailers and service providers, but also including the retail customer—and employees have, under the regime of competition by size, suffered disproportionately.  The UBIMS solution offers definable relief from immediate impacts of the rigged private supply chain, but is there more?

One answer to such a question may be intuited from the U.S. healthcare system’s coming adaptation of unified service and supply platforms:  the leading innovators in IT applications in population health incorporate from the start of the change process careful attention to customer satisfaction alongside development of provider confidence in the outcomes fostered by IT change.  The nature of these developments, while not yet universal, is useful for thinking about what improvements may be sought in other real, functioning markets through UBIMS.  Is it realistic to expect a UBIMS public supply chain to reduce prices, to cut delays, and at the same time to improve quality—whether stated as quality of service, or of manufacture, or as measured in some other way?

Perhaps a better analogy than the health care system can be imagined:  suppose for a moment that all delicatessens in a large city could order directly from manufacturers all the foods not made in-house on a UBIMS platform.  Delicatessens typically allow customers small samples, such as a slice of corned beef or several bites of potato salad, prior to purchase.  All delis powered by UBIMS could collect customer impressions of quality in this exact moment and forward it directly to manufacturers, linking these to manufacturers’ lot numbers, dates of expiration, nutritional information, etc.  Amazon, for instance, solicits customer responses right on the page where orders can be placed, and Amazon’s vendors also request and publish on the same page customer satisfaction rankings.  But Amazon itself also has a stake in this, often being their vendors’ competitor, so that it is small wonder that the Amazon supply chain is littered with warnings about limited numbers of items available.

But since UBIMS is a public supply chain platform, it will have no stake in the availability of specific items, or in their prices, and via the UBIMS rule of fair trade no stake in delivery cost.  In fact, the analogy with amazon.com goes only so far in explaining the power of a public supply chain platform.  The after-market in private passenger vehicles, despite the viral growth of CarMax and its imitators and the availability of accident databases by VIN number, presents numerous opportunities for informing consumers as fully as possible prior to purchase.  Even with such highly standardized products, UBIMS would find room for operation through owner service records and parts replacement validation, just to name a pair of areas in this massive market that would benefit from a public supply chain platform.  The popularity of the PBS Radio show, Car Talk, illustrates the breadth and depth of opportunities in this market.

A third example of a market that could develop rapidly under a UBIMS public platform is that of consumer appliances:  Consumer Reports touches only one edge of the information potentially usable from implementation of UBIMS here.  The problem in this area is that there is virtually no public aftermarket in used appliances, as our landfills testify.  Even smaller cities could benefit from a fact-based market in these, as landlords seek to fill semi-furnished rentals and new homebuyers stock their properties with appliances—often in the futile hope of avoiding a large home-improvement loan to do so.  Emergent technologies in heating and cooling can also complicate purchasing plans by lacking long service records.  A data-based approach to this market could convert a scrap operation into a thriving after-market business in major household appliances, or turn the small appliance department of a large used-goods store into a business with reliable profits, ending forever the appeal of cheap imported goods in this market and giving the big-box stores some real competition.  Buying reliable used appliances could come to resemble buying clothing in stores where you get to try things on before purchase, the difference being that someone else has tried on the appliance and told you his or her experience with a specific example of product.

The basic product of the UBIMS supply chain system is information relevant to market participants, publicly available in a model of cooperation and validation under an overall model of absolute competition, as opposed to competition based on size alone.  Quality assurance is the fundamental criterion of markets in goods and services—quality that is assured by reliable information in an open system that cannot be gamed or otherwise compromised.  This is the medium- and long-term promise of UBIMS, and it is why the UBIMS public supply chain platform will become the commercial platform of choice.

Job-Killing Machines in the Modern Information Age

by Luke Ho-Hyung Lee

We have developed numerous “job-killing machines” in the real market (or supply chain process) through the use of IT and networking technology over the last 20 to 30 years of the Modern Information Age.  These machines have significantly contributed to the shift to a more efficiency-oriented supply side environment by killing jobs and have altered the whole economic environment.  Strangely, it seems nobody has recognized this yet, and no expert has considered this at all in his or her public ruminations about the economy.

What are the job-killing machines in the real market process?

As you may have recognized, every company on the supply side has aggressively adopted IT and electronic networking mainly to increase its own productivity and efficiency in the functional real market process.

By developing many kinds of market (transaction or supply chain) systems and applications through the use of IT and networking technology in this way, two major effects are to be observed: (1) the number of transactions and functions in the supply chain process has shrunk remarkably—as with Wal-Mart, e-buyer, e-seller, and e-auctioneer systems, and existing e-marketplace systems in the real market process—and (2) numerous collaborative activities to increase efficiency of function have arisen in all sectors of the real market.   

Finally, by integrating those two major activities, numerous private information-based supply chain networks (mostly in big companies) have developed in all industries, and virtually only the big companies benefit.

Due to the superior position of big companies with their own efficient supply chain networks, the businesses of small- and medium-size companies have weakened and eventually been destroyed, and accordingly, many jobs in those companies also have been killed.  Moreover, these private information-based supply chain networks have contributed to the shift to a more efficiency-oriented supply side environment and changed the whole economic environment in the Modern Information Age.  That is, a mutually complementary relationship between the supply side and the existing market process has been firmly established, and this has completely altered the economic environment.  Thereafter, the following activities have been significantly facilitated in almost all industries on the supply side by killing numerous jobs in the domestic market: (1) aggressive adoption of IT progress, (2) off-shoring and outsourcing activities toward lower-labor cost countries, and (3) broad adoption of robotic machines and automation processes equipped with information (software) devices.

In this situation with the private information-based supply chain networks in the real market process, employment has continually and inevitably declined, and policies aimed at improving it have been unsuccessful.  Therefore, it could be said that private information-based supply chain networks have been the major job-killing machines in the Modern Information Age.

What is the private information based supply chain network?

Let me explain more details about the private information-based supply chain network with an example, the Zara case:

Zara, the largest clothing company in the world, developed a private information-based supply chain network by vertically integrating its logistics and collaborative functions through the use of IT and networking technology and now needs just two weeks to develop a new product and get it to its own stores, compared with a six-month industry average, enabling Zara to launch around 10,000 new designs each year, far more than its competition.

Zara has been remarkably successful over the last 20 to 30 years, and as a result, Amancio Ortega, Chairman of Zara, was named the fifth richest person in the world by Forbes in 2012.

But what happened to others in the industry?  Most small individual designers, manufacturers and stores were much less competitive than Zara, and most of them in their supply chain lost their businesses. That is, the whole supply chain in this industry became seriously unstable. Only some of them could be subordinated to Zara for survival.  As a result, the employment situation for middle- and lower-income workers in this industry has seriously and relentlessly deteriorated.  Unfortunately, Zara is no longer an isolated case.

Large companies in every industry have developed similar private information-based supply chain networks for their own distribution, and those big companies have used their supply chain networks only for their own benefit.  Thereafter, sadly, the employment situation for middle- and lower-income workers has seriously worsened in almost all industries, worldwide. 

Let me ask you directly:  “Without first replacing those job-killing machines, can you change this worsening course of the employment situation and revitalize the economy?  That is, can you solve the current economic crisis only with the old economic policies or stimulus plans?”  I believe it to be impossible in most existing market or supply chain processes.  That’s the real problem.

What should we do then?

Remember, we had also developed numerous private information networks in information until the Internet as a meta-platform was introduced and popularized in 1996.  What has happened in employment since then?

On the basis of the Internet, we could have developed numerous web-based software applications, software platforms such as Facebook and platform devices such as smart phones. Further, we could also have developed numerous platform-based software applications on the basis of those software platforms and platform devices. That is, we could have created numerous new businesses and jobs in the IT and Internet sectors of the market. Those meta-platform, software platforms, and platform devices were major job-creating machines in the information process, or so we were told at the time.

A question is raised: “Why haven’t we developed such a meta-platform or platforms also in the real market process?”

Unfortunately, without being aware of it, we have made a simple but serious mistake in developing many kinds of market, transaction, or supply chain systems and applications based on information technology.  As a result, information technology has been used in the wrong way in developing those systems and applications.  Thereafter, no competing public information-based supply chain infrastructure as a meta-platform in the real supply chain process has been developed.  (Please see more details about the mistake in “The Real Cause of the Current Economic Crisis and a Suggested Solution”.)

Another question is raised: “Is it possible to develop such a meta-platform as a job-creating machine also in the real market or supply chain process?”

To answer this question, we must be clear about what the Internet is.  It is a meta-platform for efficiently transferring information (digital codes) between multiple information sources and recipients.  Is it also possible to develop such a meta-platform for efficiently transferring physical objects and services between multiple suppliers and customers?  Yes, it is possible.  The concepts are the same, even if one is for transacting information and the other one is for transacting the sale and purchase of physical objects and services.

I believe the conditions and circumstances for the development of such a meta-platform, that is, a new public information-based supply chain infrastructure, are already in place.  That is, information technologies, facilities, devices, and people are already in place to develop it.  The only issue that remains is the will to develop it.  Moreover, the solution is already in sight.  It only needs to be implemented.  Once decision-makers are willing to make the necessary choices, it will be relatively easy to implement, and it will not take long to see positive results.

I believe there will be no sustainable solutions for the current economic crisis until the existing job-killing machines, that is, the private information-based supply chain networks, are replaced by a new job-creating machine, that is, a new public information-based supply chain infrastructure (or platform) that helps rather than disrupts and destroys existing businesses.

I would strongly recommend that governments and leaders of the Western countries, especially the United States and the Euro-zone countries, initiate the development of this new job- creating machine, and provide the active assistance and support necessary to revitalize their own economies and also the world economy, and that we do so immediately.

Time is running out.  The old private supply chain networks continue to shed jobs and wreck businesses.  This new public information-based supply chain infrastructure can and will reverse these effects in time to avert collapse.

About the Author

Ho-Hyung (Luke) Lee (luke.h.lee@ubims.com) is by training a lawyer, an international businessman and entrepreneur – and an inventor. He is currently the CEO of UBIMS, Inc. ("Ubiquitous Market System"). UBIMS, Inc. is a patent-pending startup with a new business method and system for the information-based public supply chain infrastructure.