It’s a 401 (k) World. By Thomas L. Friedman. New York Times, April 30, 2013.
Blue Bureaucrats Strangling Innovation: The Case of Uber. By Walter Russell Mead. Via Meadia, April 30, 2013.
Uber In NYC Shows What’s Really Wrong With The US Economy. By Tim Worstall. Forbes, April 27, 2013.
hard to have a conversation today with any worker, teacher, student or boss who
doesn’t tell you some version of this: More things seem to be changing in my
world than ever before, but I can’t quite put my finger on it, let alone know
how to adapt. So let me try to put my finger on it: We now live in a 401(k)
world — a world of defined contributions, not defined benefits — where everyone
needs to pass the bar exam and no one can escape the most e-mailed list.
what I mean: Something really big happened in the world’s wiring in the last
decade, but it was obscured by the financial crisis and post-9/11. We went from
a connected world to a hyperconnected world. I’m always struck that Facebook,
Twitter, 4G, iPhones, iPads, high-speech broadband, ubiquitous wireless and
Web-enabled cellphones, the cloud, Big Data, cellphone apps and Skype did not
exist or were in their infancy a decade ago when I wrote a book called “The
World Is Flat.” All of that came since then, and the combination of these tools
of connectivity and creativity has created a global education, commercial,
communication and innovation platform on which more people can start stuff,
collaborate on stuff, learn stuff, make stuff (and destroy stuff) with more
other people than ever before.
exciting is that this platform empowers individuals to access learning,
retrain, engage in commerce, seek or advertise a job, invent, invest and crowd
source — all online. But this huge expansion in an individual’s ability to do
all these things comes with one big difference: more now rests on you.
are self-motivated, wow, this world is tailored for you. The boundaries are all
gone. But if you’re not self-motivated, this world will be a challenge because
the walls, ceilings and floors that protected people are also disappearing.
That is what I mean when I say “it is a 401(k) world.” Government will do less
for you. Companies will do less for you. Unions can do less for you. There will
be fewer limits, but also fewer guarantees. Your
specific contribution will define your
specific benefits much more. Just showing up will not cut it.
policy implications? “Just as having a 401(k) defined contribution plan requires
you to learn more about investing in your retirement, a 401(k) world requires
you to learn much more about investing in yourself: how do I build my own
competencies to be attractive to employers and flourish in this world,” said
Byron Auguste, a director at McKinsey and one of the founders of Hope Street
Group, which develops policies to help Americans navigate this changing
economy. “As young people rise to that challenge, the value of mentors, social
networks and role models will rise.”
parenting, teaching or leadership that “inspires” individuals to act on their
own will be the most valued of all.
say that “everyone has to pass the bar now,” I mean that, as the world got
hyperconnected, all these things happened at once: Jobs started changing much
faster, requiring more skill with each iteration. Schools could not keep up
with the competencies needed for these jobs, so employers got frustrated
because, in a hyperconnected world, they did not have the time or money to
spend on extensive training. So more employers are demanding that students
prove their competencies for a specific job by obtaining not only college
degrees but by passing “certification” exams that measure specific skills — the
way lawyers have to pass the bar. Last week, The Economist quoted one labor
expert, Peter Cappelli of the Wharton business school, as saying that companies
now regard filling a job as being “like buying a spare part: you expect it to
every major news Web site today has a “most e-mailed list” that tracks what’s
popular. Journalists who tell you they don’t check to see if their stories make
the list are lying. What makes those lists possible is the use of Big Data and
the cloud, which can also measure almost any performance in any profession in
real-time and tailor rewards accordingly. More schools can now instantly
measure which teachers’ kids are on grade level in math every week, Jamba Juice
can see which clerk sells the most between 8 and 10 a.m., and factories in
China can find out which assembly lines have the fewest errors. On
schoolloop.com, you can track your kid’s homework assignments and daily
progress in every K-12 class. A most e-mailed list is coming to a job near you.
a lot of this scary. We’re entering a world that increasingly rewards
individual aspiration and persistence and can measure precisely who is
contributing and who is not. This is not going away, so we better think how we
help every citizen benefit from it.
to start, argues Ryan Burke, the director of jobs and workforce for Hope
Street, with changing our education-to-work system to one that “enables and
credits a variety of viable pathways to needed skills.” But “for students and
workers to take advantage of the opportunities open to them in a ‘defined
contribution’ world, they will need much better information to inform their
decisions. Right now it’s much easier to evaluate a choice about buying a car
or picking a mutual fund” than to find the competencies employers are looking
for and the best cost-effective way to obtain them.