Thomas Friedman, the noted New York Times columnist who wrote the seminal book The World is Flat in 2004, had some sage advice yesterday for President Obama that should resonate with plan advisors. The theory has been that with increases in productivity, especially caused by technology, everyone benefits and has relatively equal access to the larger pie. Unlike with Obama’s first term, when the sky was falling, the economy is in relatively good shape and technology innovation is robust — but that can cause a problem for those not keeping up. Though there is record productivity, wealth and innovation, median incomes are falling, inequality is rising and high unemployment remains persistent. Why and what to do, asks Friedman.
The reason why is that the world has gone from connected when Friedman wrote his book in 2004 to hyper-connected with the advent of Facebook, LinkedIn, Cloud computing and 4G networks, as well as ubiquitous mobile devices and apps. Companies now have extreme access to cheap labor and “genius,” and more routine tasks are being automated. People who thought they could coast on their formal education or training must constantly learn and relearn to keep up. Those who do keep up, have access to capital and are constantly innovating will get a bigger piece of the economic pie, leaving others to blame and complain.
For the so called “Triple F” advisor focused on fees, funds and fiduciary, the hyper-connected world is a real threat, since many of those functions are being performed cheaply and sometimes remotely. Advisory firms that leverage technology — whether through databases for prospecting, automating routine functions or communicating and educating participants — will lap their competitors. Employees who do not keep learning and relearning — lacking what Friedman calls “CQ” or Curiosity Quotient rather than IQ — will be left behind and automated out. Friedman advises that we’re moving from an era of “yes we can” to an era of “yes you can” — or even “yes you must.”
