Growing up in the heartland of industrial decay in the “Black Country” of England, and later traveling the globe through my telecom career, I’ve been a first-hand witness to the benefits of globalization and also to the personal disenfranchising impact it can bring. But globalization itself — simply the efficient movement of goods, money, information and people across borders — is in many respects a byproduct of other changes. Today’s drivers are connectivity and automation, enabled by the massive technological revolution that is under way by way of an increasingly global, mobile and intelligent internet.
We’ve been here before. As with previous industrial revolutions, this digital age is delivering many positive socioeconomic benefits to our lives, yet also causing considerable disruption and inequalities that must be addressed. For example, in developing nations it has already been responsible for helping move a billion people out of poverty and into the global economy.
However, it is also creating a wider gap between the labor market’s winners and losers. This is most visible in concentrated manufacturing-based regions within industrial nations. The narrative has not changed for decades: Skilled workers benefit from expanding global opportunity, while manufacturing employees suffer due to automation and outsourcing — all while middle-class income has largely stagnated.
Where are we failing?
Globalization is often blamed for this displacement of skills and workers. The alleged villains remain the same: A trade imbalance, coupled with a skepticism that global commerce and technology advancements will be able to create real new economic growth, but rather hurt existing commerce. This is a huge oversimplification of what’s happening. To find the real driver of this trend, it’s important to dig deeper. Doing so will reveal the failure of industrialized societies to adapt to rapid technology-driven changes in the workforce.
What does this mean? If we don’t come to grips with this widespread and high-velocity shift from essentially “doing the work” to “creating, organizing and supervising,” we run the risk of continued economic stagnation, increasing social inequalities and a more insular society. That stands to worsen as the next wave of innovation marries mass global connectivity with big-data analytics and artificial intelligence. These are likely to disrupt traditional business models and industries even more than the digital revolution, accelerating an upstream movement in the labor force from administrative and manual workers to professional trades and knowledge workers.
Not adapting greatly impairs our ability to take advantage of the massive opportunities made available by these new technologies that could create huge improvements in health care and education, while birthing entirely new businesses and economic growth. And it’s that progress that will bring many more people out of poverty and continue expanding the global economy. Remember — this is a good thing!
How do we fix it?
The obvious first step is to do a better job of preparing for, and limiting, the known negative impacts of disruption. This can be accomplished by increasing infrastructure investment, striking more balanced trade agreements and fostering an environment more conducive to new business creation, among other things. But what is most critical is addressing the underlying cause of our inability to adapt our workforce to changes in technology by adapting, retraining and redirecting our labor force.
We must fundamentally redesign our education and career systems, as they are built around a legacy of the previous industrial model and its needs. In fact, the whole notion of a “high school” was largely in response to the displacement of youth from agricultural work in the industrial revolution. An investment of similar scale in people and systems is once again critical to address the shift in required skill sets, except this time the emphasis should be on retraining an existing, more mature workforce.
These new skills must be grounded in the practical realities of less actual “doing” and more “organizing.” Today’s well-rounded skill set includes emphasis not only on what a worker knows (like STEM), but who they are and how they behave. This means fostering the development of softer, more creative, social-orientated skills such as teamwork, judgement, agility and adaptability — a far cry from the focus of previous industrial revolutions.
Given the structural nature of the needed changes to human capital, the investment is significant. In fact, it’s so substantial that it will require never-before-seen collaboration across governments, corporations and educational institutions. A shared-risk model with creative financial incentives such as tax, pension usage, subsidized loans and public financing will be needed to help with the transition. But both the public and private costs associated with facilitating this change should be more than offset by the benefits of having a productive, adaptive and mobile workforce that is less dependent on the state.
In many ways, the digital revolution and connecting of the planet represent our greatest opportunity for improving the quality of lives, achieving greater equality and driving economic growth on a global scale — while also making the world a safer, better place through increased interdependencies. We should not derail this general force for good by treating just the symptoms and not the cause. Let’s invest in our people.
Gary Smith has served as CEO of networking company Ciena for more than 15 years. He is a member of President Obama’s National Security Telecommunications Advisory Committee, and serves on the board of directors for Avaya Inc. and Commvault Systems Inc. Reach him @Ciena.
This article originally appeared on Recode.net.