"That Used to Be Us" is a welcome new book from Tom Friedman and Michael Mandelbaum. It is an eloquent wake-up call at an important time in our history. We will ignore it at our peril.
It stands in sharp contrast to Tyler Cowen’s new book, "The Great Stagnation", which I reviewed in my previous posting. Tyler suggests that the US is entering into a period of diminished growth and returns as a result of secular forces that cannot be overcome in the foreseeable future.
Friedman and Mandelbaum will have none of this. While acknowledging that we face increasing pressure, their book passionately and forcefully argues that our future is up to us. They believe that, if we make the right choices, we can regain the growth and prominence as a nation that we enjoyed only a few decades ago.
We stand at a crossroads. We need a new narrative to drive our choices in the years ahead. The narrative we embrace will to a large extent determine the path we take and the destination we reach. Narratives have a tendency to become self-fulfilling prophecies because they have such a powerful influence on choices and actions.
So, what is the narrative that Friedman and Mandelbaum offer? It has two components: one consisting of transition and change and the second focusing on what needs to be done to respond to this change.
In describing the transition we are experiencing as an economy and society, Friedman and Mandelbaum focus on two fundamental forces re-shaping our environment – the IT revolution and globalization. These are framed as challenges rather than opportunities because they require significant adaptation, something that we have not yet fully recognized, much less accomplished.
The big problem in the eyes of Friedman and Mandelbaum is that the end of the Cold War led to a sense of complacency. We had won. The enemy that had occupied our attention and energy throughout the post World War II era had been defeated. We stood unchallenged politically and militarily as a global power. We became complacent, lulled by our own success.
What we didn’t understand, however, was that the downfall of the Communist bloc had an unforeseen consequence. It unleashed into the global economy more than 2 billion people who had been blocked from participating in global markets for decades. These people had a hunger and sense of urgency that drove them to get better much faster than anyone had anticipated.
And they had new weapons. Information technology and globalization provided them with the means to participate in global markets in ways that would not have been possible for previous generations. We faced formidable competitors that we did not even see.
But the challenges here are even deeper. The responses of the past are simply not adequate for dealing with the intensified competition unleashed by IT and globalization. Chapter 5 of the book is perhaps the best part of the book. This chapter explores in depth the structural changes to the labor force which are re-shaping how we do business. Without going into great detail in this review, the key point is that the success of our workforce increasingly hinges on expanding the segment that can be characterized as “creative creators” – “people who do their nonroutine work in distinctively nonroutine ways.”
This emphasis on creativity has dramatic implications for the workplace as Friedman and Mandelbaum explain:
Continuous innovation is not a luxury anymore – it is becoming a necessity. In the hyper-connected world, whatever can be done, will be done. The only question for a company is whether it will be done by it or to it: but it will be done. . . . So a company that does not practice continuous innovation by taking advantage of every ounce of brainpower at every level will fall behind farther and faster than ever before.
In discussing the changing workforce, Friedman and Mandelbaum cite Carlson’s law, named after Curtis Carlson, the CEO of SRI International:
Innovation that happens from the top down tends to be orderly and dumb. Innovation happens from the bottom up tends to be chaotic but smart.
This analysis is very consistent with the Big Shift perspective that I have written about extensively in other venues as well as here. We are wrestling with a fundamental shift in what is required to succeed in business, shaped by both new digital technology infrastructures and public policy shifts towards liberalization. Citing a business adage that “you win in turns”, Friedman and Mandelbaum make the case that this period of profound shift is fraught with challenges for incumbents and ripe with opportunity for new entrants. Unless we understand the nature of the Big Shift playing our around us, we will be blindsided by those who do and who are more adept at harnessing new forces to attack entrenched positions.
Implications for education
This increasing importance of “creative creators” has a significant implication for education:
For us to grow, we have educate people to do jobs that don’t yet exist, which means we have to invent them and train people to do them at the same time.
Another corollary for education is that we need to teach and inspire creativity and not be satisfied with the basic skills of reading, writing and arithmetic. As Friedman and Mandelbaum put it, everyone must find their “extra” to cultivate that will differentiate them from others.
In this context, I wish Friedman and Mandelbaum had put more emphasis on the need to foster learning throughout one’s entire career. They spend a lot of time discussing necessary changes to our educational system to adapt to this evolving labor market. That is fine, but we are now in a world where the educational system is just one small part of the learning challenge.
An equally important issue is how to sustain and even accelerate learning on the job. While many companies have training programs to strengthen and expand one’s skills, far fewer companies have thought through the mechanisms required to accelerate talent development on the job. If we don’t get that right, all the education in the world will not enable us to keep up in an increasingly competitive global market. As my colleague, John Seely Brown, likes to say, the half life of the average job skill is now about five years, so if we are not continually replenishing our skills, we will rapidly become marginalized and irrelevant.
As if these challenges were not enough, we also face two other challenges at the same time: unsustainable increases to government debt and unsustainable damage to our environment. As Friedman and Mandelbaum characterize it, a war on math and physics by significant segments of the population encouraged us to remain in extended denial regarding the severity of these challenges. Another way of framing it is that our time preference significantly shifted to value the present rather than future. In other words, we were willing to trade the likelihood of severe long-term damage in favor of having more resources in the present.
Now we have to respond to four challenges simultaneously. In assessing our potential to address these challenges, Friedman and Mandelbaum stress the importance of both capacity and will, or as I like to frame them, will and skill. Friedman and Madelbaum have little doubt about our capacity to solve these challenges – their big concern is our will. I would certainly agree regarding this assessment. Addressing these challenges effectively requires that we first overcome the complacency and defeatism that pervades our leadership circles in business and government, Friedman and Mandelbaum declare that unfortunately
people have gotten used to [the current state of affairs]. Indeed, that sense of resignation, that sense that, well, this is just how things are in America today, that sense that America’s best days are behind it and China’s best days are ahead of it, have become the subject of watercooler, dinner-party, grocery-line and classroom conversations all across America today.
So, what is to be done?
Friedman and Mandelbaum argue that effectively resolving the challenges facing America will require collective action on a large scale that goes beyond the fragmented initiatives we see today.
It begins with re-focusing our attention. Friedman and Mandelbaum observe that we have been consumed over the past decade with “chasing the losers” – focusing on a “war on terrorism” conducted by the disenfranchised and disaffected. The problem is that, in the process, we lost sight of those 2 billion people entering the global labor force and scrambling to catch up with developed economies. We need to shift our focus to these competitors and mobilize our resources to engage with them.
Friedman and Mandelbaum argue that a successful resurgence of America will hinge on the five pillars of prosperity that sustained a partnership between the public and private sectors. The authors argue that these pillars have been the key drivers of the nation’s growing success in the global economy over the past two centuries:
- Providing public education for a growing portion of the population
- Building and modernizing infrastructures
- Encouraging immigration from other parts of the world
- Government support for basic research and development
- Implementing appropriate regulation of private economic activity
Now, there is a bit of a contradiction, or at least a paradox, here. At the very same time that Friedman and Mandelbaum make such a compelling case that we are in the midst of a profound global shift in terms of how we work and live, they fall back on traditional pillars as the answer to drive America’s success in the future.
Perhaps there is a need to challenge whether these pillars are sufficient, or even appropriate, to respond to the Big Shift playing out around us. Four out of the five pillars (immigration being the one exception) are classic “push” approaches – top down programs depending upon some ability to anticipate what will be required in decades ahead. But what if we are moving to a “pull” world where such top-down approaches are increasingly challenged? What creative new public policy efforts might have even greater impact on our global competitiveness?
Friedman and Mandelbaum themselves make the case that the changes we are experiencing around the world have a systematic effect of empowering individuals at the expense of the top-down institutions that govern our economies and societies. Yet, the solution to our problems appears to rely on the very top-down institutions that are being undermined everywhere we turn – mobilizing large economic, educational and governmental institutions that are being challenged on every front.
Friedman and Mandelbaum argue that the problem is compounded by the fact that American society has “strayed from three of the core values on which American greatness depended on the past”:
- Shifting from delayed gratification to short-term gratification
- “Loss of confidence in our institutions and in the authority of their leaders across the society”
- “Weakening of our sense of shared national purpose”
So, even if these institutions and programs are appropriate, we appear to have lost the values required to support such massive collective action focused on long-term impact. From time to time, Friedman and Mandelbaum appear to fall prey to Sputnik or Manhattan Project nostalgia.
Friedman and Mandelbaum show in sharp contrast the energy and initiative of plain people throughout America:
America’s greatest strength is the fact that wave after wave of people still either come to this country or come of age in this country eager to try something new, or spark something extra, undeterred by obstacles, hard times, money shortages, or weak-kneed politicians. Indeed, what keeps us optimistic about America is the seemingly endless number of people who come here or live here who just didn’t get word.
Why aren’t these bottom up initiatives getting more traction? Maybe it is because they are undermined on every side by push-based institutions that have not only outlived their usefulness but have now become serious obstacles to amplifying the passion, energy and entrepreneurialism of people who “just didn’t get the word.”
Maybe the issue is far more profound than the extreme polarization and the powerful special interests that hold our public policies captive as so eloquently captured by Friedman and Mandelbaum. Maybe it goes to the root issue of reassessing the rationale for our institutions. Why do they exist in the first place? Maybe we need a new rationale that would drive powerful waves of institutional innovation which in turn would create the conditions for economic success and social improvement.
Friedman and Mandelbaum find some comfort in the notion that a shock to the system will help to pull us out of our complacency, whether it takes the form of a market driven shock, a climate driven shock or a political shock like a Third Party campaign that they clearly favor.
Perhaps there is another way. Perhaps rather than finding a suitable shock to challenge and transform the core of our system, we should begin on the edge or multiple edges. From there, perhaps we might craft pragmatic pathways that help to mobilize a critical mass of people and resources to build new institutions and practices. This approach might be more effective at tapping into the forces re-shaping the world around us and, most importantly, more effective at amplifying the passion and power of the individual.
What would these pathways look like? Well, that would take at least one more blog post to sketch out and perhaps a book to do it justice. One thing is for sure – we will only discover the full pathway once we set out on the journey. It is not a pathway that can be fully mapped out in advance, but will become clearer as we proceed.
To embark on that journey, we need a new narrative. Friedman and Mandelbaum provide the kind of narrative we need, with the right blend of frustrated optimism. The future is indeed bright but we need to muster the sense of urgency required to tackle the significant obstacles that stand in our way. “That Used to Be Us” provides a promising platform for defining a narrative focused on the opportunity ahead. We desperately need to pay attention to the wake-up call.