The job market may be hitting rock bottom, but the “intangible" sector of the economy—comprising industries that, like health care and education, produce nothing concrete but have long-lasting effects—could be the best path for development, writes economist Michael Mandel in BusinessWeek. “Tangible” industries—like manufacturing—have shrunk by 1.8 million jobs, but “knowledge-based” industries managed to add 500,000 jobs since the recession began.
These intangibles aren't well measured by the GDP, but they have proved resistant against the current downturn. “This division between the tangible and intangible sectors is a bit messy in practice,” says Mandel, because tech and research sectors fit both categories. But for Barack Obama’s administration, it’s worth asking “whether the shift to intangible production is a sustainable economic strategy over the long run.”