Labor Market in a Flat World

Labor Market in a Flat WorldA Flat WorldIn 2005, over 400,000 tax returns were prepared overseas.

Radiologists in other countries are reading your MRI.

Someone in India is taking your order or fixing your problem

You can pay your bills, apply for a loan and do all your banking without ever talking to anyone.

Youve become your own ticket agent, baggage handler and concierge.

Advancements in Computer tech, Biotechnology and Nanotechnology are automating everything.

The Internet links workers and work 24/7.

Companies can go where the talent is cheapAnd they do.

Since 2000, 150 million educated workers have joined the global workforce.There are 150 million people in the entire US workforce.

Are all 150 million people in the US workforce in the global workforce?In 2005,3.3 million Chinese graduated from college, 600,000 of them with engineering degrees.3.1 million Indians graduated, all fluent in English. 350,000 have engineering degrees.1.3 million Americans graduated, 70,000 with degrees in engineering.

$700 a month provides a solid living for a college-educated call center worker in India.A Chinese manufacturing worker makes $265/month or $3,195/year.Wow! Thats cheap!How did we get here?

The FlattenersPhase IBerlin Wall, MS WindowsNetscapeWork-flow software

The FlattenersPhase IIOpen SourcingOutsourcingOff-shoringSupply ChainingInformation DivingThe Steroids

What does this mean for us?

Traditional View of WorkforceWorkplace is reasonably linear, stable and predictableWe can predict:What work will be availableWhat skills/training will be requiredCareer pathsPace of change is slow time to change if necessaryTraditional education/training programs will workThis is the old way of thinking.Traditional views wont cut it anymore.

Work is . . .Chaotic and unpredictableDecentralizedCollaborativeTechnology-intenseInformation-richEntrepreneurial

Workers must be . . .InformedAdaptableLiterateHighly SkilledEntrepreneurial

Three kinds of jobs . . .Fungible jobsAnchored jobsValue-added jobs

Fungible jobs:Are easily digitizedDont require face-to-face interactionRely on rulesRequire minimal interpretation or decision-makingCan be partially or completely automatedThese jobs can be outsourced . . .Travel/ticketingJunior accounting and legal servicesBill/mortgage processingMedical testing/diagnosticsComputer programmingMedical transcription

Anchored JobsMust be performed in a particular geographic location

Anchored Tier 1Requires low skill levels Pays low wages

Anchored Tier 2 Require higher skills Pay higher wages

But there can be fungible parts of anchored jobs . . .Fungible Parts of Anchored jobs . . .Radiologists in India are reading X-rays for American patients.McDonalds is outsourcing drive-thru ordering.Hospitals in India now offer reasonably-priced post-surgical sight-seeing trips.They serve 55,000 foreign patients/year75% are uninsured and underinsured AmericansValue-Added JobsDepth/breadth of skillsConstant changeHigh levels of interaction, decision-making, creativityTechnological proficiency

Traditional QuestionsDemand?Wages?Working conditions?Preparation?Advancement?Questions people considered when choosing a career in the round world.New Labor Market QuestionsLess money somewhere else?Could it be automated?How will technology change work requirements in the future?

Questions todays students should ask themselves when choosing a career.Automation?Turbo Tax has replaced your accountant.ATMs and on-line banking have replaced your bank teller.E-ticket check-in has replaced your ticket agent and baggage handling.Automation and do-it-yourself tests may make Med Techs obsolete.Average Global Salaries for ProgrammersPoland/India/ChinaCanada/IrelandUSA$5,000--$11,000$23,000 -- $34,000$60,000 --$80,000What do you think will happen to these jobs?How Does Tech Change the Job?With the Internet you can be your own lawyer.Wireless healthcare changes how medical professionals interact with patients.Automotive technology workers must be able to work with computerized shop equipment, electronic components and traditional hand tools.Financial Planners more focus on empathy, ability to work with people.Career Plans in a Flat WorldEvaluate career paths for fungibility and potential for automationMonitor impact of technology.Anticipate & respond to job/skill changes.Prepare for Pier II Anchored or Value-Add jobsFocus on Life-time Employability.