Chapter 2: Abundance, Asia, and Automation A presentation by Lisa Whittington University of Georgia Spring 2009
<ul><li>Daniel Pink starts off reflecting in the days of yesteryear when typical advice from parents was </li></ul><ul><li>“ Go to school, get good grades.” </li></ul><ul><li>“ Go to college. Pursue a profession that will give you a decent standard of living and prestige.” </li></ul>Be a doctor. Be a lawyer.
If someone was good at math and science they were encouraged to be a doctor or if they were good at English and history, they were encouraged to be a lawyer. When computers started booming, youngsters who were really good at math and science chose high tech. Many flocked to business school. Success was spelled M-B-A
Knowledge Workers People who get paid for putting to work what one learns in school rather than for their physical strength or manual skill. These are the people who excelled in Left Directed thinking and had the ability to apply theoretical and analytical knowledge.
Meet your knowledge workers... Lawyers Doctors Executives Engineers Accountants
Knowledge workers have shaped the character, leadership and social profile of the modern age. They have shaped middle class America.
Middle class America must pass through these knowledge booths on the way to the land of knowledge work. These tests are the gatekeepers into middle class society. PSAT SAT GMAT LSAT MCAT These tests measure Left-Brain thinking. They are left brained instruments requiring logic and analysis .
PSAT SAT GMAT LSAT MCAT The exercises on these tests are linear, sequential, and bounded by time. Daniel Pink calls it the “SAT-ocracy” These tests reward test takers for zeroing in on a single correct answer .
PSAT SAT GMAT LSAT MCAT Many nations have devoted considerable time and treasure into producing left brain workers. Daniel Pink says the SAT-ocracy is in its dying days.
Left Directed thinking still matters very much in society…. ...but it is not enough.
Today we are moving into an era in which Right-Directed thinking will increasingly determine who gets ahead.
The Effect. Diminuated relative importance of Left Directed thinking and the corresponding increased importance of Right Directed thinking. The Causes: Abundance Asia and Automation
America has mega-mall shopping sites everywhere . We have size, selection, and a wide scope of things we did not have 30 years ago. The choices are preposterously more interesting, more attractive, and more bountiful in everything than it was back in the seventies. Throughout malls are acres of good looking, low cost merchandise. Abundance
<ul><li>America has all sorts of stores for all sorts of stuff. </li></ul><ul><li>Some Best Buys are bigger than a neighborhood block and have electronic and designer technology. Best Buy has 39 different varieties of cordless phones. </li></ul><ul><li>Pet stores sell $15,000 a day worth of merchandise for non-humans. </li></ul><ul><li>Anyplace in USA you can find a mall that was not visible years ago. This is characteristic of modern life. </li></ul>Abundance
Most of the history our lives were defined by scarcity. Today the defining feature of social, cultural, economic life is abundance. Abundance
Businesses must create products that are beautiful, unique and meaningful. Middle Class America is obsessed with design as demonstrated in Target. For example-- Target and other retailers have sold nearly 3 million units of Rashid’s Garbo Molded Polypropylene wastebasket .
Mundane utilitarian products must become objects of desire. Abundance Never before have we had such a wide assortment of goods and products in high quality and low prices. To succeed in this crowded marketplace, a product must also be aesthetically pleasing. Engineers must figure out how to get things to work. But if those things are not pleasing to the eye or compelling to the soul, few will buy them.
$ $ $ $ $ $ $ $ $ Left brains have made us rich and are powered by armies of knowledge workers.
<ul><li>Self Storage business is booming. </li></ul><ul><li>Self Storage is a $17 billion dollar annual business industry in the U.S. </li></ul><ul><li>It is growing faster in other countries. </li></ul>When we can’t store our stuff we throw it away. USA spends more on trash bags than 90 other countries spend on everything.
$ $ $ $ $ $ The ironic result of abundance—the very triumph of Left thinking has lessened its significance. Prosperity unleashed by Left Directed thinking placed a premium on Right Brained sensibilities-- <ul><li>Beauty </li></ul><ul><li>Spirituality </li></ul><ul><li>Emotion </li></ul>
Mastery of design, empathy, play, and other “soft” aptitudes is now the way for individuals and firms to stand out in a crowded marketplace.
Asia Meet America’s competition of Knowledge workers
Asia Computer Science and Engineering major from Mumbai India. Salary: $15,000 a year The salary these engineers receive afford them a middle class lifestyle. India’s colleges and universities produce about 350,000 engineering graduates per year.
The work of software engineers and left brained professionals in North America and Europe are intimidated by programmers and their counterparts throughout India. It used to be an almost exclusive field in the United States. White collared American workers used to earn $70,000 at this job. Asians earn the same wages as someone working in Taco Bell doing the same job.
<ul><li>More than half of the Fortune 500 companies now outsource software to India. </li></ul><ul><li>48% of GE’s software is developed in India. GE employs 23,000 people in India. </li></ul><ul><li>Hewlett Packard employs several thousand software engineers in India. </li></ul><ul><li>Siemans employs 3,000 computer programmers in India and is moving another 15,000 jobs over seas. </li></ul><ul><li>Oracle has 5,000 employees in India. </li></ul><ul><li>WiPro employs 17,000 engineers in India who do work for Home Depot, Nokia, and Sony. </li></ul><ul><li>Any job that is English based in US, UK, or Australia can be done in India. The only limit is the imagination. </li></ul>
Financial services for Lehman Brothers, Bear Stearns, Morgan Stanley, JP Morgan Chase, have contracted out number crunching and financial analysis to Indian MBA’s.
<ul><li>In India you will find-- </li></ul><ul><li>Chartered accountants who prepare American Tax returns . </li></ul><ul><li>Lawyers who do legal research for American lawsuits. </li></ul><ul><li>Radiologists who read CAT scans for American hospitals . </li></ul>
Outsourcing for white collar jobs is also migrating to other parts of the world such as Russia, Brazil, and Poland.
A typical chip designer in US earns $7,000 per month. In India, $1,000 per month . Aerospace engineers in US earn $6,000 per month. In Russia they do the same job for $650. Accountants in US earn $5,000 a month. Accountants in India earn $300.00 per month.
One in four IT jobs will be off shored by 2010. According to Forrester Research, 3.3million white collar jobs and $136 billion in wages will shift from US to India, China, and Russia by 2015 .
American jobs will go overseas. This is precisely what happened to routine mass production jobs which moved across the seas in the second half of the 20 th century. Those factory workers had to master a new set of skills. Many of today’s workers will likewise have to command some new right brain aptitudes.
Automation John Henry, born with a hammer in his hand was a figure of immense strength and integrity. He was part of a team who smashed through mountains to clear tunnels for railroad tracks. He progressed and became the stuff of legend. One day a salesman came bearing a steam powered drill he claimed could outperform the strongest man. John Henry scoffed. A contest was proposed: Man vs. Machine. Who could do it faster?
In the end, John Henry was exhausted by the superhuman effort, collapsed and died. John Henry’s demise became a parable of the industrial age: Machines can do some things better than humans. Human dignity was sacrificed .
Garry Kasparov is the John Henry of the new age. In 1996 he defeated the worlds’s most powerful chess computer. In 1997 he took on a more powerful machine. The IBM computer “Deep Blue.” The match was called “the brain’s last stand.” Deep Blue defeated Kasparov. He arranged for a rematch against “Deep Junior,” another powerful computer from Israel. He never lost a match .
<ul><li>Chess is quintessentially a left brain activity. </li></ul><ul><li>No room for emotion. </li></ul><ul><li>Depends on memory. </li></ul><ul><li>Thinks rationally. </li></ul><ul><li>Depends on brute calculations. </li></ul><ul><li>Kapsparov said he could analyze 1-3 moves per second. Deep Junior was able to analyze 2 – 3 million moves per second. </li></ul><ul><li>Kasparov still believed humans had other advantages . </li></ul>
Humans have much to offer but when it comes to chess and other endeavors that depend heavily on rule based logic, calculation, and sequential thinking, computers are better, stronger, and faster. In 1997 Kasparaov said “No computer can beat me.” Today Kasparov says “I give it only a few years .” Last century, machines proved they could replace human backs. This century, new technologies are proving they can replace humans left brain.
<ul><li>To recap: three forces are tilting the scales in favor of R-Directed thinking </li></ul><ul><li>Abundance has satisfied and over satisfied the material needs of millions boosting the significance of beauty and emotion and accelerated the individual's search for meaning. </li></ul><ul><li>Asia is now performing large amounts of routine white collar, L-directed work at significantly lower costs thereby forcing knowledge workers in the advanced world to master abilities that can’t be shipped overseas. </li></ul><ul><li>Automation has begun to effect this generation’s white collar workers in much the same way it did last generation’s blue collar workers requiring L-directed professionals to develop aptitudes that computers can’t do better, stronger, or faster. </li></ul>
What does America do about this? Has catering to left brained education created a monster? Is the answer to improving the American economy in the right brain? How so? What do you think? What is happening in America? Are you paying attention? Do you think this will affect your future in America? 3/26/2009 IBM announced they were cutting 5,000 American jobs and shipping the jobs off to India...
Pink, Daniel, A Whole New Mind, Berkeley Publishing Group, New York, NY, 2006, 28-47