high-end jobs are out of reach of many. Low education means low-paying jobs, plain and simple, and this is where more and more Americans are finding themselves. Many Americans can't believe they aren't qualified for high- paying jobs. I call this the “American Idol problem.” If you've ever seen the reaction of contestants when Simon Cowell tells them they have no talent, they look at him in total disbelief. I'm just hoping someday I'm not given such a rude awakening.
In the winter of 2004 I had tea in Tokyo with Richard C. Koo, chief economist for the Nomura Research Institute. I tested out on Richard my “coefficient of flatness”: the notion that the flatter one's country is-that is, the fewer natural resources it has-the better off it will be in a flat world. The ideal country in a flat world is the one with no natural resources, because countries with no natural resources tend to dig inside themselves. They try to tap the energy, entrepreneurship, creativity, and intelligence of their own people-men and women-rather than drill an oil well. Taiwan is a barren rock in a typhoon-laden sea, with virtually no natural resources-nothing but the energy, ambition, and talent of its own people-and today it has the third-largest financial reserves in the world. The success of Hong Kong, Japan, South Korea, and coastal China can all be traced to a similar flatness.
“I am a Taiwanese-American with a father from Taiwan and with a Japanese mother,” Koo told me. “I was bom in Japan and went to Japanese elementary school and then moved to the States. There is a saying in China that whatever you put in your head and your stomach, no one can take away from you. In this whole region, that is in the DNA. You just have to study hard and move forward. I was told relatively early by my teachers, 'We can never live like Americans and Canadians. We have no resources. We have to study hard, work hard, and export hard.'”
A few weeks later I had breakfast in Washington with P. V. Kannan, CEO of 24/7 Customer. When it comes to the flat world, said P.V., he had just one question: “Is America prepared? It is not... You've gotten a little contented and slow, and the people who came into the field with [the triple convergence] are really hungry. Immigrants are always hungry-and they don't have a backup plan.”
A short time later I read a column by Steven Pearlstein, The Washington Post's business columnist/reporter, under the headline “Europe's Capitalism Curtain.” From Wroclaw, Poland (July 23, 2004), Pearlstein wrote: “A curtain has descended across Europe. On one side are hope, optimism, freedom and prospects for a better life. On the other side, fear, pessimism, suffocating government regulations and a sense that the best times are in the past.” This new curtain, Pearlstein argued, demarks Eastern Europe, which is embracing capitalism, and Western Europe, which is wishing desperately that it would go away.
“This time, however, it is the East that is likely to prevail,” he continued. “The energy and sense of possibility are almost palpable here... Money and companies are pouring in-not just the prestige nameplates like Bombardier, Siemens, Whirlpool, Toyota and Volvo, but also the network of suppliers that inevitably follows them. At first, most of the new jobs were of the semi-skilled variety. Now they have been followed by design and engineering work that aims to tap into the largest concentration of university students in Eastern Europe... The secret isn't just lower wages. It's also the attitude of workers who take pride and are willing to do what is necessary to succeed, even if it means outsourcing parts production or working on weekends or altering vacation schedules– things that would almost certainly trigger months of acrimony and negotiation in Western Europe. 'The people back home, they haven't got any idea how much they need to change if they want to preserve what they have,' said Jose Ugarte [a Basque who heads the appliance manufacturing operations of Mondragon, the giant Spanish industrial cooperative]. 'The danger to them is enormous. They don't realize how fast this is happening...' It's not the dream of riches that animates the people of Wroclaw so much as the determination to work hard, sacrifice what needs to be sacrificed and change what needs to be changed to close the gap with the West. It is that pride and determination, says Wroclaw's mayor, Rafal Dutkiewicz, that explain why they are such a threat to the 'leisure-time society' on the other side of the curtain.”
I heard a similar refrain in a discussion with consular officials who oversee the granting of visas at the U.S. embassy in Beijing. As one of them put it to me, “I do think Americans are oblivious to the huge changes. Every American who comes over to visit me [in China] is just blown away... Your average kid in the U.S. is growing up in a wealthy country with many opportunities, and many are the kids of advantaged educated people and have a sense of entitlement. Well, the hard reality for that kid is that fifteen years from now Wu is going to be his boss and Zhou is going to be the doctor in town. The competition is coming, and many of the kids are going to move into their twenties clueless about these rising forces.”
When I asked Bill Gates about the supposed American education advantage-an education that stresses creativity, not rote learning-he was utterly dismissive. In his view, those who think that the more rote learning systems of China and Japan can't turn out innovators who can compete with Americans are sadly mistaken. Said Gates, “I have never met the guy who doesn't know how to multiply who created software... Who has the most creative video games in the world? Japan! I never met these 'rote people'... Some of my best software developers are Japanese. You need to understand things in order to invent beyond them.”
One cannot stress enough: Young Chinese, Indians, and Poles are not racing us to the bottom. They are racing us to the top. They do not want to work for us; they don't even want to be us. They want to dominate us-in the sense that they want to be creating the companies of the future that people all over the world will admire and clamor to work for. They are in no way content with where they have come so far. I was talking to a Chinese- American who works for Microsoft and has accompanied Bill Gates on visits to China. He said Gates is recognized everywhere he goes in China. Young people there hang from the rafters and scalp tickets just to hear him speak. Same with Jerry Yang, the founder of Yahoo!
In China today, Bill Gates is Britney Spears. In America today, Britney Spears is Britney Spears-and that is our problem.
Dirty Little Secret #3: The Education Gap
All of this helps to explain the third dirty little secret: A lot of the jobs that are starting to go abroad today are very high-end research jobs, because not only is the talent abroad cheaper, but a lot of it is as educated as American workers—or even more so. In China, where there are 1.3 billion people and the universities are just starting to crack the top ranks, the competition for top spots is ferocious. The math/science salmon that swims upstream in China and gets itself admitted to a top Chinese university or hired by a foreign company is one smart fish. The folks at Microsoft have a saying about their research center in Beijing, which, for scientists and engineers, is one of the most sought-after places to work in all of China. “Remember, in China when you are one in a million– there are 1,300 other people just like you.”
The brainpower that rises to the Microsoft research center in Beijing is already one in a million.
Consider the annual worldwide Intel International Science and Engineering Fair. About forty countries participate by nominating talent through local affiliate affairs. In 2004, the Intel Fair attracted around sixty-five thousand American kids, according to Intel. How about in China? I asked Wee Theng Tan, the president of Intel China, during a visit to Beijing. In China, he told me, there is a national affiliate science fair, which acts as a feeder system to select kids for the global Intel fair. “Almost every single province has students going to one of these affiliate fairs,” said Tan. “We have as many as six million kids competing, although not all are competing for the top levels... [But] you know how seriously they take it. Those selected to go to the international [Intel] fair are immediately exempted from college entrance exams” and basically get their choice of any top university in China. In the 2004 Intel Science Fair, China came home with thirty-five awards, more than any other country in Asia, including one of the top three global awards.
