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Dov Seidman, the CEO of LRN, a company that helps other companies create sustainable business cultures, and the author of How: Why How We Do Anything Means Everything, summarizes the change from Flat World 1.0 to 2.0 this way: “We have gone from connected to interconnected to interdependent. All the links are getting so much tighter. So many more people can now connect, collaborate, and partner in much deeper ways. When the world is tied together this intimately, everyone’s values and behavior matter more than ever, because they impact so many more people than ever.”

Creators and Servers

And that brings us back to America.

All these dramatic changes in the workplace, coming in rapid-fire succession, have left a lot of people feeling up in the air and asking, “Where do I fit in? How do I stay relevant in my job? And what kind of skills do I need to learn at school?” The short answer is that the workplace is undergoing a fundamental restructuring that every educator, parent, and worker needs to understand.

The pressure on workers starts with the fact that the combination of the Great Recession and the hyper-flattening and hyper-connecting of the global marketplace is spurring every company to become more productive—to produce more goods and services for less money and with fewer workers. This explains why, despite the recession, U.S. productivity has gone up, corporate profits have gone up, and unemployment has gone up all at the same time. Companies are learning to do more with less, so more and more old jobs are never coming back and more and more new jobs are being done by machines and microchips.

“There is a big tectonic change happening, driven by technology,” said Raghuram Rajan, a professor of finance at the University of Chicago’s Booth School of Business and the author of Fault Lines. Throughout the post–World War II period, until 1991, “it typically took on average eight months for jobs that were lost at the trough of a recession to come back to the old peak,” said Rajan. But with the introduction of all these new technologies and networks over the last two decades, that is no longer the case. With each recession and with each new hyper-flattening and hyper-connecting of the global marketplace, more and more jobs are being automated, digitized, or outsourced.

“Look at the last three recessions,” said Rajan. “After 1991, it took twenty-three months for the jobs to come back to prerecession levels. After 2001, it took thirty-eight months. And after 2007, it is expected to take up to five years or more.” A key reason is that in the old cyclical recovery people got laid off and were rather quickly hired back into the workforce once demand rose again. The nature of the work did not change that radically from one recession to the next, so workers did not have to adjust that much. Today, said Rajan, under the pressure of globalization and the IT revolution, industries are becoming far more focused on productivity. And “once they have started letting people go, they have realized why not go whole hog and rethink entirely how we do things and where we do things?”

Byron Auguste, a managing director at the McKinsey & Company consulting firm, who has worked on this subject, said a 2011 McKinsey study indicates that historically in a downturn, when there is a drop in demand, companies restructure. In past recessions, they would make up for lost business through a combination of laying off workers and accepting lower profits or even losses. So those companies would retain 60 to 70 percent of the workers in order to preserve their core base of employee expertise, while letting 30 to 40 percent go. Then, when the economy started to recover and demand rose again, they would hire back the workers that were laid off. With each recession over the last two decades, though, this pattern has been less and less pronounced. In the recession of 2008, said Auguste, citing McKinsey’s research, companies made up for roughly 98 percent of their lost