How do these four seemingly random things all relate to one another – and, most importantly, to you? Thomas L. Friedman examines these very topics in his book “The World is Flat”. He references ten individual flatteners that changed business across the world. These ten flatteners are as follows:
1. Collapse of the Berlin Wall
3. Workflow Software
4. Open Sourcing
6. Off shoring
7. Supply Chaining
8. In sourcing
10. “The Steroids”
These ten factors have made a dramatic impact on the way business is done in the world and will continue to for many years to come. Globalization is upon us and is shaping everything – and that includes your career path. But despite the fact that the book was written in 2005, there are already new factors that are changing and reshaping the global environment that were not apparent even two years ago.
Let’s back up. When the word “globalization” first started popping up in our vernacular, it meant that companies were lowering costs by relocating aspects of their business to offshore locations around the world. Certain types of jobs in the U.S. became scarce as they went to overseas workers. World wide development and dissemination of information and technology were occurring, and at high speeds.
Looking to the near future – and even examining the current world – we see a very different picture of the world than what it was even as recently as 2005. The inflation rate within the US economy has been on the rise for the past couple years. This has devalued the dollar, therefore making the cost of doing business in other countries more expensive. It will not be long before other countries are looking to the United States as a place to do foreign direct investments to reduce their cost of doing business – reciprocating our own previous actions. The short of it is that jobs are not fleeing to overseas locations as quickly as they had been.
One of the biggest catalysts accelerating the situation is the increasing cost of fuel. The debate as to whose fault this is isn’t as important to this discussion as the fact that it is happening and consequently transforming our world. While the cost to diffuse information is still the same, everything else has started to shift dramatically.
Years ago as Boeing investigated the opportunity to build various parts of its new 787s around the world, the company obviously took into account the cost of fuel to transport items. But at that time, it was a cost effective solution; but now, many companies are feeling the burn of increased fuel costs and a decreased valuation of their dollar, making solutions like that illogical. Remember that those two factors go hand in hand: the dollar’s value decreases and therefore can’t buy as much, causing prices to spiral upwards – including that of oil. So while the price of fuel has undoubtedly risen, it hasn’t skyrocketed to the extent we perceive it has. The real issue is that we have not adjusted to the new, lower value of our currency because it has fluctuated so dramatically in such a short period of time. $5 simply doesn’t have as much buying power as it used to.
The only viable solution for a business is to start to reevaluate its outsourcing policy and strategy to ensure that it is still as cost effective as possible. Right now it may be better to outsource a data entry job to somewhere like India, but if the current economic trends continue – more people working from home, the countries we are outsourcing to moving out of third world country status, and dollar devaluation causing our position in the global economy to change – the price variations that make that a profitable move will cease to exist.
This does not necessarily mean that Boeing will completely close down all operations in other countries. All this means is that perhaps the economic pendulum has swung to its apex and is shifting back into equilibrium – newer companies sensitive to the changing world order may be creating more opportunities in our home country rather than automatically delegating business around the world.
This is why the personal brand is a necessity. The flow of jobs to other counties has sparked endless debate about whether it’s a positive or negative occurrence, but perhaps it doesn’t even matter because it’s not a long lasting trend. You need to be ready for the back swing of the pendulum, when the job opportunities that left the U.S. because of cost effectiveness return home. If the dollar does not increase its value, then you need to be ready with your brand because if you are not ready to grab that marketing or IT job when it opens up, someone else will be.
It has been evident for some time that while it may be less expensive to produce information technology or manufacture at offshore sites, the time investment required to make them successful in many cases almost balances out the cost benefit. With the price benefit removed from the equation it is only logical for a business to create more jobs for the American worker.
While manufacturing jobs are obviously affected by this trend, given the nature of transportation and cost of energy relationship, information-based and general “white collar” jobs are also affected. Economies turn; it is in their nature to go through cycles of ups and downs. Your brand can adapt to these changes and still always emanate the fact that you have what it takes to succeed in the current economic environment. A personal brand gives an individual a step up whether you’re working in a recession or a growth period, a period of inflation of deflation; it makes you ready for tomorrow.