Economists often compare China's and India's entry into the global economy to the moment when the railroad lines crossing America finally connected New Mexico to California, with its much larger population. “When the railroad comes to town,” noted Vivek Paul, the Wipro president, “the first thing you see is extra capacity, and all the people in New Mexico say those people-Californians-will wipe out all our factories along the line. That will happen in some areas, and some companies along the line will go out of business. But then capital will get reallocated. In the end, everyone along the line will benefit. Sure, there is fear, and that fear is good because that stimulates a willingness to change and explore and find more things to do better.”
It happened when we connected New York, New Mexico, and California. It happened when we connected Western Europe, America, and Japan. And it will happen when we connect India and China with America, Europe, and Japan. The way to succeed is not by stopping the railroad line from connecting you, but by upgrading your skills and making the investment in those practices that will enable you and your society to claim your slice of the bigger but more complex pie.
SIX: The Untouchables
So if the flattening of the world is largely (but not entirely) unstoppable, and holds out the potential to be as beneficial to American society as a whole as past market evolutions have been, how does an individual get the best out of it? What do we tell our kids?
There is only one message: You have to constantly upgrade your skills. There will be plenty of good jobs out there in the flat world for people with the knowledge and ideas to seize them.
I am not suggesting this will be simple. It will not be. There will be a lot of other people out there also trying to get smarter. It was never good to be mediocre in your job, but in a world of walls, mediocrity could still earn you a decent wage. In a flatter world, you really do not want to be mediocre. You don't want to find yourself in the shoes of Willy Loman in Death of a Salesman, when his son Biff dispels his idea that the Loman family is special by declaring, “Pop! I'm a dime a dozen, and so are you!” An angry Willy retorts, “I am not a dime a dozen! I am Willy Loman, and you are Biff Loman!”
I don't care to have that conversation with my girls, so my advice to them in this flat world is very brief and very blunt: “Girls, when I was growing up, my parents used to say to me, ”Tom, finish your dinner—people in China and India are starving.“ My advice to you is: Girls, finish your homework-people in China and India are starving for your jobs.”
The way I like to think about this for our society as a whole is that every person should figure out how to make himself or herself into an untouchable. That's right. When the world goes flat, the caste system gets turned upside down. In India untouchables may be the lowest social class, but in a flat world everyone should want to be an untouchable. Untouchables, in my lexicon, are people whose jobs cannot be outsourced.
So who are the untouchables, and how do you or your kids get to be one? Untouchables come in four broad categories: workers who are “special,” workers who are “specialized,” workers who are “anchored,” and workers who are “really adaptable.”
Workers who are special are people like Michael Jordan, Bill Gates, and Barbra Streisand. They have a global market for their goods and services and can command global-sized pay packages. Their jobs can never be outsourced.
If you can't be special-and only a few people can be-you want to be specialized, so that your work cannot be outsourced. This applies to all sorts of knowledge workers-from specialized lawyers, accountants, and brain surgeons, to cutting-edge computer architects and software engineers, to advanced machine tool and robot operators. These are skills that are always in high demand and are not fungible. (“Fungible” is an important word to remember. As Infosys CEO Nandan Nilekani likes to say, in a flat world there is “fungible and nonfungible work.” Work that can be easily digitized and transferred to lower-wage locations is fungible. Work that cannot be digitized or easily substituted is nonfungible. Michael Jordan's jump shot is nonfungible. A bypass surgeon's technique is nonfungible. A television assembly-line worker's job is now fungible. Basic accounting and tax preparation are now fungible.)