Learning to move with the tideMost companies and entrepreneurs are dealing with difficult times without even grasping the fundamentals of our condition. Most of us are operating under the delusion that we are experiencing a particularly tough recession. The fallacy is premised on past experiences that are clouding our view of present and future realities.
The tough truth is we have entered a new paradigm. Yet many people in both the private and public sectors are assuming current events are a heady dose of the familiar, old circumstances. But that is not the case. Around the world, we are experiencing globalization that is shaking every economy and market to its core.
This summer I traveled extensively in Ireland and the U.S., which are arguably polar opposites among responsible, developed economies, but which both face difficult economic adjustments. Comparing what I witnessed in those two economies with what I see happening in Korea, plus having had extensive conversations with our partners in Japan, I have come to a sobering realization.
It may not be exactly what Alan Toffler had in mind when he coined the term “future shock,” but we are experiencing something very similar. No matter what people may have debated about globalization, it is now very much in effect. It is shaking out market inefficiencies, often in very painful ways.
Even “free markets” have had their protections removed. Regardless of governmental regulations, lesser skilled jobs are moving from advanced markets to developing nations. Companies recovering from the financial shocks of 2008 have discovered more cost-effective processes than older, more labor-intensive means through technology and outsourcing. Consequently, the recent economic rebounds have not been matched with expected re-employment.
Independent “knowledge professionals” represent more and more of the labor force. Decreasing numbers of “permanent” employees mean more reliance on multi-skilled, independent specialists on a plug-in and plug-out basis for short- and medium-term projects. This major development is becoming an increasingly common aspect of this new paradigm.
Furthermore, according to my observations in Ireland, the U.S. and Korea have been steadily spreading economic disparity. In all three economies, I have seen an erosion of the middle classes, and a strengthening of the upper-middle classes and upper classes, while the lower classes are growing in size. At the same time, I have seen the middle class getting by on less, and becoming much less aggressive consumers.
On the flip side, we see in certain parts of China, Vietnam, Indonesia, Thailand, India and now parts of Africa the creation of expanding middle and upper classes. While the global economy does not operate on a zero-sum-game basis, it is undeniable that wealth is being more equitably redistributed at the expense of the traditionally advanced markets. Standing back and looking at the overall reality, there are many positive things to be said about globalization. But as an American, I can feel some real pain.
Looking at the U.S., I noticed that two years ago there was a political backlash in the form of the Tea Party movement and related reactionary forces, who issued the following demand: “I want my country back!” Most of these hand-wringers were white, middle class, middle-aged or older. I also know there are people in Ireland who look back to the days of the Celtic Tiger, hankering for “the good ol’ times.”
The harsh reality is that we are not going to get our countries back to the good old times. The world has moved on, largely removing economic boundaries and thereby creating new commercial realities. Similar observations are being made by increasing numbers of people. But what is unsettling is that none of us can completely get our heads around the scale of this change.
To put it in a way that many readers of this paper may be able to relate to, what we are experiencing today is like a form of culture shock. When experiencing culture shock, we are very well aware that we are in a state of psychological disorientation. But we can never fully understand the shock’s entirety until after we get through that phase in our lives.
The same can be said as we go through today’s massive economic adjustments. Unlike culture shock, which can last for weeks or even months, this globalized future shock is taking years and could well take decades, as various economic factors resolve themselves on a globalized scale.
Given all of this, what am I advising my sons to do?
First, keep on learning. In a sense, it doesn’t really matter what one is studying today, but it is important to keep one’s learning skills sharp for tomorrow. More than ever, today’s young people will have to reinvent themselves professionally over and over - and yet over again - during their careers.
Second, while it is important to reasonably master whatever skills you may employ to make a living, it will become much more important to be able to understand once-unrelated fields and skills to keep oneself economically competitive. The Internet can be a great exploration tool, but it can also be a trap. Too often, people use the Internet to reconfirm their current perspectives, without using the same tools to expand their understanding of new perspectives.
Finally, understand and accept that while we cannot go back to the past, the present will soon change. Whether change is good largely depends on the individual, as people can learn, not just to sink or swim, but also to surf. Of course, it’s even more important not to drown. And one way to drown is by trying to paddle back to where we once were, rather than learning how to move with the incoming tide.
* The author is president of Soft Landing Korea, a business development firm, and an alliance partner of Odgers Berndtson Japan, a global Big Six executive recruitment consulting company.
by Tom Coyner