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Expect an outcropping of “Med-Meds”—the equivalent of Club Meds with medical facilities built in. Scuba in the morning, emergency oxygen in the afternoon.
    The biggest difference between the old work and the new is the sharply accelerating pressure to do it all better, faster, and cheaper. How much better, faster, and cheaper? There’s no necessary limit. Even scientific barriers once thought impervious are yielding.
    THE NECESSITY OF BETTER, FASTER, AND CHEAPER
    The economic system that dominated most of the twentieth century allowed producers and sellers a fairly relaxed existence. Economies of production scale and stable markets (with their corresponding oligopolies and regulations) protected large enterprises against unruly competition. Small, neighborhood sellers competed only with other local shops and services.
    With enterprises, as with people, a comfortable existence tends to weaken motivation to work hard. The old industrial economy did not, for the most part, ignite great entrepreneurial zeal. Big companies maintained research and development departments that produced a steadily respectable output of patented invention, but major breakthroughs were rare, and intended to be so. Too much change would threaten the capacity to plan, and might destabilize the system. Most innovation occurred at the margin, in cosmetic design rather than in the basics. Automobile tail fins grew longer, but the quality of suspensions and engines improved only gradually. “New and improved” dishwashing detergents and kitchen appliances appeared with predictable regularity but were never especially new, nor very improved.
    By the middle decades of the twentieth century, sellers could be relaxed about controlling their costs. With unions negotiating wage rates for entire industries, wage increases could be passed along to consumers in the form of higher prices without imperiling any particular company. Nor were sellers interested in squeezing their suppliers unduly. Any change of supplier threatened the efficiency of large-scale production, whose smooth flows required long-term contracts and stable relationships.
    As a result of these accommodations of employees and suppliers, wages and prices tended to spiral upward. Price increases raised the cost of living, which caused workers to seek additional wage increases. Occasionally, government sought to control wages and prices directly by establishing official wage and price ceilings or by “jawboning” industrial and union leaders to keep prices within bounds, but to no great effect. Inflationary cycles gathered momentum until the Federal Reserve Board raised interest rates and plunged the economy into recession.
    The emerging economy provides a telling contrast. As noted, buyers are less constrained by production scale, distance, or information. With access to a widening choice of products and services coming from almost anywhere on the globe, and armed with better comparative data about price and quality, buyers can more easily switch to something better. The easier it is for buyers to switch to a better deal, the harder sellers have to work to attract them and to keep them.
    Some researchers credit the recent upsurges in innovation and productivity exclusively, and simply, to new technologies. But they’re leaving out the crucial steps that explain
why
sellers feel far more compelled to innovate. New technologies of communication, transportation, and information are empowering buyers to find and switch to something better. This, in turn, is putting pressure on sellers to produce better. In order to survive and prosper, sellers must continuously cut costs and add value, faster than their rivals. Not only do they have to offer better products and services, but they also have to continuously improve their organizations, to make them capable of generating whole streams of better products and services faster than the competition. 2
    This trend helps explain why inflation has become