Brain Power is the fuel for the next economy?

Recently, I am reading the new book by Thomas L. Friedman, The World is Flat. As the subtitle of the book says, it is about the next stage of globalization. With only reading 30 over pages, I come to realize that the next economy or at least for the developed economy to survive, knowledge and creativity would be the next key to growth.

From the book, it was stated that most parts of the service process can be commoditized (why do I say that is because computers seem to have found their way into most of these process) and shipped to developing countries for work to be done. This means that most routine work would be packed and shipped to countries like India to be done by the relative cheaper labor there.

And since most of these routine works would be outsourced, the more complicated works would be done in the home countries. This actually benefits customers now because more personalized work could be done since time and resources are released by these routine works to offer the personalized services. But from here we can see that since it is complicated work, more skills, knowledge and brain power would be the key to providing added value in the next economy.

This means that now, at least to survive in this type of economy, there must be constant learning, which greatly increase the paper chase that everyone is running. Education and training would definitely grow into a big industry in developed countries. Now the problem is that in most of these developed countries, there is a widening income gap between the low, medium and high. Most of these routine jobs that were done in the home countries would be outsourced to other relatively cheaper countries, thus impacting the lower income level group. As globalization or outsourcing moves to higher level work, commoditizing them, the next level of people that would be impacted would be the middle income group. So now would this trend move on to the next level which is the higher income group? I am afraid not because this high income group would have the resources to at least avoid such trend hitting them hard or in some better scenario, actually able to tap these trends to their advantage.

As I propose and complained in some of my blog entries. Governments should try to help the lower and middle income people by subsidizing their source of knowledge or attaining more skills. Make attainment of knowledge and skills as cheap as possible for these groups of people. Like I said before, with the overall increase in the knowledge and skills, more sparks would fly generating more ideas and one of these ideas could be the next spurt of growth for the economy.

Although the education system is and will be difficult to make it a perfect system but I still believe it is the key to help people make up the social ladder or jump over the gap. Streaming is important, but I wish people would not use it as a form of discrimination but use it to determine who the people that need more resources for learning are. And guess what; learning does not stop when we leave the polytechnics and universities. If you do not start moving forward, you are definitely left behind. Start moving forward or people from India, China and developing countries are going to eat up your jobs because for them, it is definitely easier for them to eat up your job then you trying to maintain it. This is besides the fact that they command a lower wage than you. They can obtain their skills cheaper relatively and their governments has to spend money to build up the infrastructures needed to eat up your jobs and we all know that if a problem can be solved by money, it is not a problem at all.

Hope this would help people who are contemplating about their future.

Cheers!