The Broader Lessons
The great forces of change at work in the economy today hold tremendous promise not just for the owners of American corporations but also for American workers and consumers. Yet the turbulent energies released in their wake are understandably also fueling unease and apprehension.
More than a billion workers in developing countries are projected to enter the global labor market over the next 20 or 30 years, with most earning only a tiny fraction of the average wage in the advanced economies. Some American workers, especially (but not only) the least skilled, are sure to be adversely affected. The vast armies of new workers and their families in developing countries will also present huge new opportunities for growth, of course-opportunities that large American corporations, well capitalized and sophisticated in the use of technology, seem well positioned to exploit. But the extent to which American workers will share in those benefits can only be guessed at today. Where will the investment go, and the jobs? And what will be the impact on the number and quality of jobs remaining at home?
The continuing rapid advance of information technology is creating equally profound uncertainties. The new digital technologies will open up wholly new frontiers of economic activity, making possible the delivery of products and services that are unimaginable today. They will also radically transform the way businesses collect, process, interpret, and distribute information-in other words, the way work gets done. (The re-engineering movement will be seen in retrospect as a primitive step in this direction.) But this great structural transformation is almost certainly still in its early stages, and it will be a time of dislocation and disruption, as obsolete economic structures are torn down to make way for the new demands of the information era.
Every economic change creates losers as well as winners, and for some the price of change will be high. But even many who stand to gain from these changes have come to equate them not with opportunity but with disruption and a loss of control over their lives. In America and throughout the industrialized world, the fear of rapid economic change has already brought increasingly strident calls for stringent regulation of corporate behavior, protectionist trade policies, and other expressions of populist sentiment.
These anxieties abated in the United States during the robust expansion of the 1990s, but they have not disappeared. They will gain new force when the economy turns down, as it inevitably will, and the pressure on policy-makers to do more to relieve the anxiety may then build dramatically. The risk is that the resulting policies will exact a very high price in terms of private investment abandoned or forgone. And that, in turn, would mean lower productivity growth, which, as I argued above, is the key to our future well-being. In a very real sense, then, the solution to the problem of productivity growth will depend on how much uncertainty ordinary people are willing to bear before a backlash against the forces of change sets in.
In dealing with this problem, I believe that we have something to learn from the companies that follow their “inner voices.” Throughout these organizations there is a clear and concrete understanding of core goals and values, which helps employees remain focused on what needs to be done-even while everything around them is in flux. People know what they are doing, and why they are doing it.
In this respect, the employees of a company may not be so very different from the citizens of a country. Just as a strong sense of identity and of purpose beyond profit has helped the most successful companies navigate through confusing and unpredictable territory, a shared sense of national direction and purpose can help advance prospects for future growth.
Today, however, talk about shared purpose and economic values is largely absent from the national debate about growth. The debate is dominated instead by talk about how much growth to achieve, and how to achieve it. We are like one of the “non-visionary” firms mentioned above, paying lots of attention to the bottom line and not enough to what lies beyond it.
If people are to be persuaded to embrace change rather than resist it, if they are to be convinced of the need to live with the volatility and the radical uncertainty of the new economy rather than fight against it, they must see the possible benefits of such a stance. They must have a positive reason to open themselves up to economic forces that will sometimes seem arbitrary and out of control. They must, in short, have a sense of direction and purpose.
For many in the workforce, perhaps even the majority, the promise of greater material compensation and wider consumer choice will fill in only part of the picture. What is also needed, I believe, is a coherent vision of the place of work and learning in society and what the work experience itself might become for the majority of contributors to the new economy. At a time when so much is changing in the workplace, what are the basic principles-the core values-that should govern the employment relationship? What are the rights, responsibilities, and resources that should be accorded to those who will contribute their efforts to the new economy? How should we define this “New Economic Citizenship”? I do not have the space in this article to develop the idea fully (it is elaborated further in The Productive Edge). However, there are two aspects that I’d like to touch on briefly: those relating to information technology and to benefit structures.
The new information technologies that are transforming the workplace seem to have a Jekyll-and-Hyde aspect. To some they are job-destroying, occupation-reshaping, wage-polarizing, socially divisive wrecking balls. But that is far from the whole story. The same technologies can also offer unprecedented opportunities to move beyond the production systems of the past, systems that offered intrinsic satisfaction only to people at the top of the economic pyramid. Used well, these new technologies can eliminate much of today’s narrow, repetitive work and provide personal and professional satisfaction to a far greater number of workers than ever before in history.
Which will it be? Not easy to say, because both outcomes-liberating or repressive-are possible. We may choose to use technology to diminish the human contribution: to pressure, to downskill, or to demean. Or we may choose to use it to augment human capabilities and enhance the work experience. The point is that such a choice exists-and it is one of the key issues at stake for our society in the debate about growth. Yet that choice is hardly acknowledged in the debate today.
By affirming and reaffirming the values that the new technology should serve-for example, by protecting rather than compromising the dignity of work, granting workers control over their working environment, and making it possible for their endeavors to be appreciated and appropriately rewarded-I believe that our society stands a far better chance of realizing the full potential of technological advance.
Beyond technology lies the issue of lifelong change and career development. Just as companies such as Levi Strauss put great stress on the possibility of their employees learning new skills and moving to new roles, our society needs to think hard about the fact that lifetime careers with a single employer are now very much the exception, not the rule. As in the case of information technologies, this fact has two quite different faces. For many people, the prospect of a multiple career path with multiple employers will seem daunting, a prospect to be endured rather than welcomed. That’s the unpleasant face of change. But it is also possible to imagine a future in which individuals not only take on more responsibility for managing their own careers but also obtain more control over the resources needed to do this well.
This, I believe, is the larger implication behind current policy proposals for more portable pensions and benefits, such as health benefits, individual skill grants, tax-deductible individual training accounts-indeed, even the movement for greater parental choice of children’s schools. All such proposals move in the direction of giving individuals greater control over what they need to manage economic and technological change. Anthony Carnevale, chairman of the National Commission on Employment Policy, argues that new career development and benefit structures, by promoting autonomy and private choice, would bring the world of work into closer alignment with our society’s individualistic and participatory values. Carnevale and others believe that these offerings would offer a true alternative to the “standardized offerings of the welfare state on the one hand and the increasingly rare and uncertain embrace of corporate paternalism on the other.”
These are certainly not the only aspects of a “New Economic Citizenship.” Nor do I claim that they are the best of all possible proposals. I do believe very strongly, however, that these are the kinds of issues we should be talking about when we debate how to achieve stronger growth. Growth remains the central problem facing the American economy. But the question of how to achieve it cannot be divorced from the question of what it is for, of what kind of economy we want to build, of the values we care most about. In the final analysis, maintaining a healthy growth rate means maintaining a healthy relationship between industry and society-a relationship without which neither can survive, let alone thrive. The creations of modern industrial enterprise are a glorious living monument to society’s powers of cooperation, ingenuity, and imagination. As we stand on the threshold of the new century, we have an extraordinary opportunity to harness those same powers, those same values, to the design of the new world of work. Our nation’s future well-being may well depend on it.