Stability vs. Security [安定]

June 2, 2017
[image credit: Chris Riddell]

A conversation last night with my friend Shin Iwata from Atomico inspired me to reflect on the choices facing young people nowadays as they embark on their professional careers.

Shin penned a poignant post discussing the difference between stability and security in the professional context in Japan, concepts denoted by the same Japanese word of 安定 (“antei”). I cannot possibly do justice to Shin’s elegant piece, but one of his key arguments is that Japanese youth need to consciously choose which version of 安定 represents their ultimate goal, because stability and security can diverge.

Traditionally, the Japanese educational system conditioned young people to pursue professional security. Work hard in elementary school, participate in after-hours じゅく (cram school) in order to gain admission into a top university, and subsequently enter the pool of fresh graduates recruited by large corporations. Traditionally, the young graduate would join one of these large firms or conglomerates and work their butt off for several years with the implicit promise of a guaranteed job for life. I contend that this phenomenon was not limited to Japan.

The social pact of lifetime employment afforded workers full job security, and simultaneously a high degree of stability, so the two concepts became intertwined in people’s minds. Globalization ushered in the first wedge between the two by fostering conditions in which an employee might be expatriated to another geography for 2 to 5 years. I grew up as an expat child and derived nothing but benefit in bouncing around internationally in my youth. However, I also witnessed firsthand the dependency my father had on his firm. When the company asked us to relocate, my father was, at minimum, strongly discouraged from declining their request. In a Japanese corporation, such a refusal would be unthinkable.

I submit that stability and security have fallen even deeper into contradiction over the past decade, and that this trend is accelerating. The main driver is the second information technology revolution, i.e. the internet.

Stability(large companies) << Stability(innovative companies)

I’ve heard convincing arguments that the first IT revolution — the invention of the semiconductor and its ensuing proliferation of computing resources — represented sustainable innovation. In other words, the innovation of the silicon revolution was dramatic, but it was sustaining rather than disruptive. This innovation wave disproportionately benefited large companies by enabling them to leverage new efficiencies into their economies of scale.

In contrast, the subsequent wave of innovation, ushered in by the internet, is radically disruptive. The first ripple of this wave appeared in the technology sector (look what Slack means for Microsoft, or MongoDB means for Oracle, or AWS means for Cisco, etc.). Now technology startups conceived in the paradigm of the internet and unshackled by legacy baggage are going after large, non-tech industries, whether it be transportation (Lyft), consumer products (Dollar Shave Club), finance (TransferWise), agriculture (The Climate Corporation), etc. As I’ve mentioned in the past, the increasing connectivity to the physical world is enabling us to close the loop in industry, agriculture, and the environment.

Accordingly, large companies may still be able to offer workers a certain degree of security by force of their sheer size, inertia, and a protective labor regulatory context. However, stability in such firms is far from assured.

My message to newly-minted college graduates: Think about your ultimate goal as you embark on your career. The path that worked well for your parents is not necessarily an effective one anymore to achieve the same goal because times have changed. Finally, don’t feel you have to follow the same track as everyone else because conventional wisdom says so. There is more than one track.

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