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1,854 jobs were created as a result of foreign outsourcing in 2003. By 2008, the firm

expects nearly 6,700 new jobs in Minnesota as a consequence of the trend."

Economists often compare China's and India's entry into the global economy to the

moment when the railroad lines crossing America finally connected New Mexico to

California, with its much larger population. "When the railroad comes to town," noted

Vivek Paul, the Wipro president, "the first thing you see is extra capacity, and all

the people in New Mexico say those people-Californians-will wipe out all our factories

along the line. That will happen in some areas, and some companies along the line

will go out of business. But then capital will get reallocated. In the end, everyone

along the line will benefit. Sure, there is fear, and that fear is good because that

stimulates a willingness to change and explore and find more things to do better."

It happened when we connected New York, New Mexico, and California. It happened when

we connected Western Europe, America, and Japan. And it will happen when we connect

India and China with America, Europe, and Japan. The way to succeed is not by stopping

the railroad line from connecting you, but by upgrading your skills and making the

investment in those practices that will enable you and your society to claim your

slice of the bigger but more complex pie.

::::: SIX

The Untouchables

So if the flattening of the world is largely (but not entirely) unstoppable, and holds

out the potential to be as beneficial to American society as a whole as past market

evolutions have been, how does an individual get the best out of it? What do we tell

our kids?

There is only one message: You have to constantly upgrade your skills. There will

be plenty of good jobs out there in the flat world for people with the knowledge and

ideas to seize them.

I am not suggesting this will be simple. It will not be. There will be a lot of other

people out there also trying to get smarter. It was never good to be mediocre in your

job, but in a world of walls, mediocrity could still earn you a decent wage. In a

flatter world, you really do not want to be mediocre. You don't want to find yourself

in the shoes of Willy Loman in Death of a Salesman, when his son Biff dispels his

idea that the Loman family is special by declaring, "Pop! I'm a dime a dozen, and

so are you!" An angry Willy retorts, "I am not a dime a dozen! I am Willy Loman, and

you are Biff Loman!"

I don't care to have that conversation with my girls, so my advice to them in this

flat world is very brief and very blunt: "Girls, when I was growing up, my parents

used to say to me, 'Tom, finish your dinner-people in China and India are starving.'

My advice to you is: Girls, finishyour homework-people in China and India are starving

for your jobs."

The way I like to think about this for our society as a whole is that every person

should figure out how to make himself or herself into an untouchable. That's right.

When the world goes flat, the caste system

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gets turned upside down. In India untouchables may be the lowest social class, but

in a flat world everyone should wantto be an untouchable. Untouchables, in my lexicon,

are people whose jobs cannot be outsourced.

So who are the untouchables, and how do you or your kids get to be one? Untouchables

come in four broad categories: workers who are "special," workers who are

"specialized," workers who are "anchored," and workers who are "really adaptable."

Workers who are special are people like Michael Jordan, Bill Gates, and Barbra

Streisand. They have a global market for their goods and services and can command

global-sized pay packages. Their jobs can never be outsourced.

If you can't be special-and only a few people can be-you want to be specialized, so

that your work cannot be outsourced. This applies to all sorts of knowledge

workers-from specialized lawyers, accountants, and brain surgeons, to cutting-edge

computer architects and software engineers, to advanced machine tool and robot

operators. These are skills that are always in high demand and are not fungible.

("Fungible" is an important word to remember. As Infosys CEO Nandan Nilekani likes

to say, in a flat world there is "fungible and nonfungible work." Work that can be

easily digitized and transferred to lower-wage locations is fungible. Work that

cannot be digitized or easily substituted is nonfungible. Michael Jordan's jump shot

is nonfungible. A bypass surgeon's technique is nonfungible. A television

assembly-line worker's job is now fungible. Basic accounting and tax preparation are

now fungible.)

If you cannot be special or specialized, you want to be anchored. That status applies

to most Americans, everyone from my barber, to the waitress at lunch, to the chefs

in the kitchen, to the plumber, to nurses, to many doctors, many lawyers, entertainers,

electricians, and cleaning ladies. Their jobs are simply anchored and always will

be, because they must be done in a specific location, involving face-to-face contact

with a customer, client, patient, or audience. These jobs generally cannot be

digitized and are not fungible, and the market wage is set according to the local

market conditions. But be advised: There are fungible parts of even anchored jobs,

and they can and will be outsourced-either to

India or to the past-for greater efficiency. (Yes, as David Rothkopf notes, more jobs

are actually "outsourced to the past," thanks to new innovations, than are outsourced

to India.) For instance, you are not going to go to Bangalore to find an internist

or a divorce lawyer, but your divorce lawyer may one day use a legal aide in Bangalore

for basic research or to write up vanilla legal documents, and your internist may

use a nighthawk radiologist in Bangalore to read your CAT scan.

This is why if you cannot be special or specialized, you don't want to count on being

anchored so you won't be outsourced. You actually want to become really adaptable.

You want constantly to acquire new skills, knowledge, and expertise that enable you

constantly to be able to create value-something more than vanilla ice cream. You want

to learn how to make the latest chocolate sauce, the whipped cream, or the cherries

on top, or to deliver it as a belly dancer-in whatever your field of endeavor. As

parts of your work become commoditized and fungible, orturned into vanilla, adaptable

people will always learn how to make some other part of the sundae. Being adaptable

in a flat world, knowing how to "learn how to learn," will be one of the most important

assets any worker can have, because job churn will come faster, because innovation

will happen faster.

Atul Vashistha, CEO of NeoIT, a California consultingfirm that specializes inhelping

U.S. firms do outsourcing, has a good feel for this: "What you can do and how you

can adapt and how you can leverage all the experience and knowledge you have when

the world goes flat-that is the basic component [for survival]. When you are changing

jobs a lot, and when your job environment is changing a lot, being adaptable is the

number one thing. The people who are losing out are those with solid technical skills

who have not grown those skills. You have to be skillfully adaptable and socially

adaptable."

The more we push out the boundaries of knowledge and technology, the more complex

tasks that machines can do, the more those with specialized education, or the ability

to learn how to learn, will be in demand, and for better pay. And the more those without

that ability will be less generously compensated. What you don't want to be is a not

very special, not very specialized, not very anchored, or not very adaptable

person in a fungible job. If you are in the low-margin, fungible end of the work food

chain, where businesses have an incentive to outsource to lower-cost, equally

efficient producers, there is a much greater chance that your job will be outsourced

or your wages depressed.

"If you are a Web programmer and are still using only HTML and have not expanded your

skill set to include newer and creative technologies, such as XML and multimedia,

your value to the organization gets diminished every year," added Vashistha. New

technologies get introduced that increase complexity but improve results, and as long

as a programmer embraces these and keeps abreast of what clients are looking for,

his or her job gets hard to outsource. "While technology advances make last year's

work a commodity," said Vashistha, "reskilling, continual professional education and

client intimacy to develop new relationships keeps him or her ahead of the commodity

curve and away from a potential offshore.'"

My childhood friend Bill Greer is a good example of a person who faced this challenge

and came up with a personal strategy to meet it. Greer is forty-eight years old and

has made his living as a freelance artist and graphic designer for twenty-six years.

From the late 1970s until right around 2000, the way Bill did his job and served his

clients was pretty much the same.

"Clients, like The New York Times, would want a finished piece of artwork," Bill

explained to me. So if he was doing an illustration for a newspaper or a magazine,

or proposing a new logo for a product, he would actually create a piece of art-sketch

it, color it, mount it on an illustration board, cover it with tissue, put it in a

package that was opened with two flaps, and have it delivered by messenger or FedEx.

He called it "flap art." In the industry it was known as "camera-ready art," because

it neededto be shot, printed on four different layers of color film, or "separations,"

and prepared for publication. "It was a finished product, and it had a certain

preciousness to it," said Bill. "It was a real piece of art, and sometimes people

would hang them on their walls. In fact, The New York Times would have shows of works

that were created by illustrators for its publications."

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But in the last few years "that started to change," Bill told me, as publications

and ad agencies moved to digital preparation, relying on the new software-namely,

Quark, Photoshop, and Illustrator, which graphic artists refer to as "the

trinity"-which made digital computer design so much easier. Everyone who went through

art school got trained on these programs. Indeed, Bill explained, graphic design got

so much easier that it became a commodity. It got turned into vanilla ice cream. "In

terms of design," he said, "the technology gave everyone the same tools, so everyone

could do straight lines and everyone could do work that was halfway decent. You used

to need an eye to see if something was in balance and had the right typeface, but

all of a sudden anyone could hammer out something that was acceptable."

So Greer pushed himself up the knowledge ladder. As publications demanded that all

final products be presented as digital files that could be uploaded, and there was

no longer any more demand for that precious flap art, he transformed himself into

an ideas consultant. "Ideation" was what his clients, including McDonald's and

Unilever, wanted. He stopped using pens and ink and would just do pencil sketches,

scan them into his computer, color them by using the computer's mouse, and then e-mail

them to the client, which would have some less skilled artists finish them.

"It was unconscious," said Greer. "I had to look for work that not everyone else could

do, and that young artists couldn't do with technology for a fraction of what I was

being paid. So I started getting offers where people would say to me, 'Can you do

this and just give us the big idea?' They would give me a concept, and they would

just want sketches, ideas, and not a finished piece of art. I still use the basic

skill of drawing, but just to convey an idea-quick sketches, not finished artwork.

And for these ideas they will still pay pretty good money. It has actually taken me

to a different level. It is more like being a consultant rather than a JAFA (Just

Another Fucking Artist). There are a lot of JAFAs out there. So now I am an idea man,

and I have played off that. My clients just buy concepts." The JAFAs then do the art

in-house or it gets outsourced. "They can take my raw sketches and finish them and

illustrate them using com242

puter programs, and it is not like I would do it, but it is good enough," Greer said.

But then another thing happened. While the evolving technology turned the lower end

of Greer's business into a commodity, it opened up a whole new market at the upper

end: Greer's magazine clients. One day, one of his regular clients approached him

and asked if he could do morphs. Morphs are cartoon strips in which one character

evolves into another. So Martha Stewart is in the opening frame and morphs into

Courtney Love by the closing frame. Drew Barrymore morphs into Drew Carey. Mariah

Carey morphs into Jim Carrey. Cher morphs into Britney Spears. When he was first

approached to do these, Greer had no idea where to begin. So he went onto Amazon.com

and located some specialized software, bought it, tried it out for a few days, and

produced his first morph. Since then he has developed a specialty in the process,

and the market for them has expanded to include Maxim magazine, More, and

Nickelodeon-one a men's magazine, one a middle-aged women's magazine, and one a kids'

magazine.

In other words, someone invented a whole new kind of sauce to go on the vanilla, and

Greer jumped on it. This is exactly what happens in the global economy as a whole.

"I was experienced enough to pick these [morphs] up pretty quickly," said Greer. "Now