High-school graduates being trained for jobs in fields such as machining or plumbing were confident that their skills were in high demand — and would remain that way. These young people, not the nerds and “symbolic analysts,” may prove the winners of the next great transition, one that is more tied to the production of tangible goods than the manufacturing of digits and images. 

A world dominated by digital technology once seemed to be the inexorable future, yet we are exiting the Information Age. 

This transition has many implications: political, economic and social. It benefits investors, regions, and individuals tied to producing the tangible world, from consumer goods to missiles, spacecraft to oil and gas. The big stock winners so far in 2026 have been firms in energy, materials, consumer staples, and industry.

More important still, the transition is creating a cultural revolution driving young people away from traditional four-year colleges towards practical skills. The next generation of American workers, in other words, is skipping Joe Biden’s famous advice to “learn to code.” Goodbye to “my son the computer geek,” and hello to “my son, the plumber.”   

To be sure, the information economy has had a remarkable run and has elevated seven of the world’s eight richest people. The companies founded by these multibillionaires are worth more than most countries, at least on paper; put together, their valuation exceeds China’s gross domestic product. Apple alone is worth more than Canada’s GDP and has a valuation at about the GDP of Italy.

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This agglomeration of wealth and power and the prospect of a populace thriving as “symbolic analysts,” as the political economist (and Clinton labor secretary) Robert Reich described it in the 1990s, persuaded political elites of both parties not to stress about the demise of the country’s industrial base. Christina D. Romer, the former head of the Council of Economic Advisers in the Obama administration, dismissed “manufacturing policy” as nostalgia driven by “sentiment,” declaring: “American consumers value health care and haircuts as much as washing machines and hair dryers.” 

The great transition should put an end to such thinking. As long as countries eschew energy and industrial development, they will inevitably fall behind those that either control energy or make real things necessary in the real world, including for military purposes. This is why China, now using its industrial wealth to pursue technological supremacy, matters most after the United States; and why the oil-rich Persian Gulf region still matters a great deal. In contrast, Western Europe, deindustrializing and seemingly committed to energy scarcity, becomes ever more irrelevant.  

The pandemic and now the Hormuz crisis demonstrate why countries need strong energy and industrial sectors. Covid exposed America to the bleak reality that it could not provide basic medical equipment like masks or the basic components of pharmaceuticals. The inability to shift energy primacy from the fundamentally unstable Persian Gulf and Red Sea, places America and (even more so) the rest of the industrialized world at the mercy of unstable regimes. 

The great transition offers a way out of the West’s decline. The allure of a software-led economy has diminished, in large part because incremental increases in algorithmic technology have done  very little to expand wealth beyond the elite classes. This is epitomized by the bastion of the digital economy, California, where great wealth has been created for a relative few, while middle- and working-class prospects have deteriorated and poverty has reached alarming levels. 

Even within the tech world, things are changing. Firms specializing in space and defense are on the upswing, as I reported earlier for UnHerd. “Hardware,” notes the City Journal’s James Meigs, “is back.” Increasingly, high-tech firms are looking to apply technology to actual things, such as drones and satellites, whether in the form of Artemis, Space X, or on the battlefields of Ukraine and the Middle East. In some ways, the resurgence of the space industry, championed first by entrepreneurs like Elon Musk and now once again via a renascent NASA, returns America to its traditional self, as a builder and innovator in the material world. 

High-flying defense-tech firms like Anduril, Palantir, and Space X epitomize this shift to “deep tech” that uses software to build actual gizmos that could both protect the country and enrich its people. This includes new companies that are building space platforms and surveillance satellites, as well as robots that can conduct surgeries or fight on a battlefield. “People are shifting to harder tech,” suggests El Segundo-based Varda Aerospace co-founder Delian Asparouhov. “There is an aerospace renaissance. This can’t be done with AI — you need people to build spaceships. It’s a paradigm shift.” 

At the same time, the appeal of the digital realm has declined. After a period in which software employment surged, and the number of students seeking degrees in computer science tripled, overall software employment is down to where it was in 2017, according to the economist Gad Levanson. Few would have expected this just a few years ago. Had the previous growth patterns remained, there would be 250,000 more jobs in this sector that there are today. 

Even practiced geeks who write code are vulnerable to what economists refer to as “skills-based technological change.” Despite soaring profits at Big Tech companies like Amazon and Meta, AI programming tools are allowing for massive layoffs. Even a startup like Block, a fintech run by Twitter co-founder Jack Dorsey, has recently laid off nearly half its employees. Indeed, this is an industry-wide phenomenon. In just the first three months of 2026, there have been 52,000 tech layoffs, up 40% from last year. 

Of course, geeks aren’t the only victims. AI will clearly accelerate the loss of some blue-collar jobs, such as warehouse workers, as now projected by Walmart. Overall, MIT predicts at least 10% of all US jobs are at risk. But in the early days of the AI era, layoffs seem to be concentrated among college graduates and those with masters degrees, rather than affecting students with high-school or trade-school diplomas.

Silicon Valley, the epicenter of AI development, is particularly exposed, as jobs contract and public services dwindle. A recent study by Joint Venture Silicon Valley predicts that upwards of 400,000 jobs in the area are threatened. So, too, are jobs in those occupations built to service the marketing, accountancy, and legal needs of the tech elite. San Francisco and San Jose are suffering the nation’s largest employment declines in these fields.

This pattern is also spreading to the broader professional classes. Employment in most business-service fields, such as publishing, marketing, educational services, and content creation, have either flatlined or declined. Goldman Sachs, for example, now claims that AI is reducing jobs at their shop far faster than new ones can be generated. Two-thirds of business leaders, in a recent survey, suggest ChatGPT will lead to large layoffs of white-collar workers over the next five years, particularly for “coders” and “symbolic analysts” 

So, who survives the AI onslaught? Some elite AI engineers could experience a windfall, until they are surpassed by their own machines. Big global investors could become much richer, at least until the bubble pops. But the opportunities seem to be in the production of tangible goods, which could be very good news indeed for the majority of young Americans who lack a four-year degree.

Arvind Kaushal, leader of the manufacturing practice at Booz & Company, estimates that there will be some 600,000 new manufacturing jobs opened in this decade. Part of the reason is an aging workforce: The portion of the skilled manufacturing workforce over the age of 55 has doubled in the last 10 years — half of the active workers are above the age of 45. The most recent study on welders, estimated a shortage of 340,000 in 2024.

This process is changing the attitudes of both younger people and their parents. One survey from 2023 found that roughly 83% of Gen Z  — including 90% of those who already hold college degrees — feel that learning a skilled trade can be a better pathway to economic security than college. Even as total undergraduate enrollment has fallen, enrollment at trade schools has grown by 10% since 2020.

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Skilled workers are already doing better financially than college kids. Overall, there has been steady growth in demand for those who can actually build something — skilled tradespeople or industrial, chemical, or civil engineers, who are critical to the production of goods as opposed to bytes. There is already, by some measurements, effectively no occupational advantage for a four-year degree. 

As of now, our education system, with some exceptions, is not keeping up with demand. When Ford recently opened 5,000 positions for mechanics, some paying $150,000, the company struggled to find takers. There’s clearly an unmet demand for such workers.

The future job market, Palantir’s Alex Karp notes, favors either the extreme tech whizzes (at least until the machines catch up) or professions difficult to replace with robots. AI entrepreneur Rony Abovitz suggests that the “sophisticated, technically capable blue-collar worker” could prove to be among AI’s biggest winners.

The great transition is also reshaping the geography of opportunity. Areas with energy and material resources — think Texas, Oklahoma, Alaska, and North Dakota — are likely winners. The massive wave of new investment in manufacturing by companies like Samsung, Taiwan Semiconductor, and Mercedes are taking place largely in the Sun Belt; the expansion of the Intel foundry in Austin to service Space X (and potentially Amazon and Google, as well) reflects how much the silicon is trickling away from Silicon Valley. Texas, Oklahoma, Ohio and North Dakota now enjoy the most robust industrial growth, while coastal states, such as California, New York, and Massachusetts, have experienced either little growth or contraction. 

Long-time laggards Alabama and Mississippi now produce more vehicles annually than Italy or Britain. Many of the new data centers are in the rural areas of red states, including places like northern Louisiana, where Meta is building its new massive data hub. Similarly, corporate headquarters are moving from the Northeast and California to cities like Miami and Dallas.

This drive to revive the industrial sector should not be seen as a partisan issue. The Biden administration, like the Trumpians, also looked to promote reindustrialization; the vast majority of Americans favor the large-scale reshoring of industry, primarily from China.  Reshoring so far has been reflected in higher output, rather than employment, but the process is ongoing.   

The great transition will, however, impact the political balance of power, as more Electoral College and congressional seats shift from the coastal metropoles that dominated the information age to the Sun Belt and the South. As one progressive urbanist complained recently, data centers and energy policy mean that “the countryside retains its power over us.”   

In the blue states, particularly those dominated by green policies that stand in the way of re-industrialization, expect a growing radicalization: as professionals and techies lose out, they’re even seeking union protection for their threatened jobs. There will be pressure from insecure college-educated voters who are currently the base of progressive parties — Liberals in Canada, Democrats in America, and Labour in Britain and Australia — to secure the incomes they once expected, even at taxpayer expense.

The employment impacts of the great transition are clearly creating opportunities for the neo-socialists to take over in places like New York, Seattle, Portland, Oakland, Los Angeles, and Minneapolis. This Leftward movement increasingly focuses on attacks on artificial intelligence companies and proposed bans on data centers. These efforts create the basis for a political conflict between the alienated largely Left-leaning educated professionals and the Democratic party’s traditional funders, who, like Silicon Valley’s Reid Hoffman, promise that AI will serve to the cause of  “elevating humanity.”  

How the great transition plays out is still uncertain; for now, it is likely to divide the country between the renewed industrial sectors and those tied to the information economy. But no matter who wins in 2026 or 2028, technological and geographic changes are inevitable. The great transition is on, and it will shape our future — just as the Information Age, now waning, shaped decades past.