Archive for June, 2011

The Future of Success

Sunday, June 5th, 2011

“The Future of Successs” now an age-old classic, is one of the plethora of books written by Robert Reich, a reputed labor economist known for his analysis of the “New Economy” and its ramifications.

Golden: Reich tells us knowledge workers - a term developed by Peter Ferdinand Drucker - will be the prized workers of the 21st century.

Never suffering from a dearth of observations, Reich proclaims in “The Future of Success” that the “New Economy” is fundamentally different from the “Old Economy.” While the latter focused on the mass-production of labor-intensive goods, the more contemporary former term conveys an economy more focused with knowledge-intensive goods.

The shift from labor-intensive to knowledge-intensive goods may not seem at all too radical. But labor economist Robert Reich will be quick to tell you that it has grave consequences for the labor market.

Under the “Old Economy,” many a skilled hand could be put to use in manufacturing goods. The secondary sector (economic jargon for the industrial sector) was able to handle the swelling of its ranks because an increase in consumption was linked to an increase in the number of employees.

Unfortunately for job-seekers, the rules of the game have fundamentally changed under the “New Economy.” Knowledge-intensive goods do not require a large number of workers; in fact, a small number of innovative thinkers can propel a company towards success. What does this mean for companies’ employment strategies?

Shed. Shed. Shed.

Reich lists the changing rules of employment in his taxonomy as follows:

Old Economy (mid-twentieth century)
-Steady work with predictably rising pay
-Limited effort
-Wage compression, and the expansion of the middle class

New Economy
-The end of steady work
-The necessity of continuous effort
-Widening inequality”
(pp. 93-101).

Reich also notes that the New Economy has lasting implications for how we perceive education:

“The real value of a college education to one’s job prospects has less to do with what is learned than with who is met. The parents of one’s classmates, and the friends of their parents, provide connections to summer jobs and first jobs, then later to clients and business customers. Loyal alumni offer further deals. The more prestigious the university, the more valuable such connections are likely to be. To the extent that an Ivy League education has superior value, that value has less to do with the grandeur of its libraries or the cleverness of its professoriat than with the superiority of its connections.” (p.134)

His observations go beyond the scope of the merits of university education at a prestigious university:

“[P]eople at or near the top are doing remarkably well, to be sure. They possess just the right combination of talents and connections, and have sol themselves adeptly. But they are not winning it all; they are sharing some of their winnings with talented people arrayed around them on whom they depend, and those people in turn are sharing some of their winnings with others on whom they depend, and so on, extending outward and downward in a vast network of interconnections. As talented people make names in their fields, they’re worth more.”
(p.153)

To top it all off, Reich draws upon a quote from Tom Peters, who provides readers with a maxim telling of just how commoditized our world has become in his article “The Brand Called You”:

“starting today you are a brand. You’re every bit as much a brand as Nike, Coke, Pepsi, or the Body Shop […] the most important job is to be head marketer for the brand called you.”
(Fast Company, August-September 1997. pp. 83-94).

Now, more than ever, the competition to succeed is becoming increasingly ruthless. Those marginal few who make it to the top will, according to Reich, reap astronomical rewards, while the great majority of people will toil in semi-skilled and manual labor, earning pennies compared to their super-lavish, sophisticated counterparts.

So much for equality.

//By Ryo TAKAHASHI