The terms “knowledge economy” and “digital age” have been thrown around by professionals, pundits, academics, and politicians in some form or another for at least 20 years. Until this week however not one of them has presented a real grasp of the nature of this new economy. Most everyone has attempted to measure and understand the knowledge economy in the same context of the physical economy that drove the industrial age.
Starbucks this week took the first real “fiscal” step into the exponential possibilities of the knowledge economy.
This week, Starbucks CEO Howard Schultz announced the Starbucks College Achievement Plan “making it possible for thousands of part- and full-time U.S. partners to complete a college degree. ” Starbucks is partnering with Arizona State University to provide full tuition reimbursement for any of 40 undergraduate degree programs delivered online – with no requirement to stay with the company.
How significant is this step?
Schultz said in a statement that, “We as a company want to do something that has not been done before. That is, we want to create access to the American Dream, hope and opportunity for everybody.”
Schultz is absolutely correct that this will create “hope and opportunity for everybody” and that Starbucks is the first in the knowledge economy to take this step. However if you want to truly gauge the significance of this step you need to look back exactly 100 years at the first step taken in the industrial age.
In January 1914 Henry Ford announced that the Ford Motor Company would pay $5 a day to its workers and reduce the workday from nine to eight hours. The new policies helped improve standards for all American workers which helped to spark the emergence of the American middle class as improved wages and a standard workday were adopted across American industry.
In the knowledge economy that we finally entered this week, the magnitude of Schultz’s move with Starbucks will be just as significant.