Silicon Insider: Techno Roundup
April 16 -- Did you happen to notice the recent news that at least 14.6 million American workers — that's one in eight — held stock options in 2002? Not only that, but the majority of these workers were not in Silicon Valley, nor employees of high-tech start-ups. Ninety-four percent aren't even in top management.
In fact, there were more option holders in the South than in the West, and a surprising percentage worked in old-line manufacturing companies and banks, and many were union members. Just as important, the number of U.S. workers holding stock options — and researchers aren't sure we've got the full number even now — was twice the estimate.
In other words, a fundamental transformation has taken place in the U.S. economy. And it has happened beneath the radar screens of economists, statisticians and government officials.
Stock options have always been the game for high tech. Indeed, even now you are most likely to get options if you work in the computer industry. But these new numbers suggest that, like profit-sharing, flexi-time and telecommuting before it, once again as goes the technology industry so eventually goes the rest of the U.S. economy.
This part at least isn't entirely surprising. A high-tech start-up, by being able to hand out considerable numbers of options, with their attendant potential for immense financial reward if the company is a success, can recruit the brightest and most adventurous talent in its industry. Its more established competitors, bleeding talent, can only fight back by offering options as well.
The public companies in that market now must either respond with higher salaries, better benefits and facilities, or ersatz options of their own. Most can't pull that off, and so they begin to die, creating the revitalizing turnover in companies that propels the tech industry forward.
What's interesting is that this structure now seems to be moving out into non-tech industries in the U.S., and will no doubt change the competitive environment in them. This is both good (because it will make those industries more dynamic, creative and competitive) and bad (because it will likely increase the volatility of those markets as well).
