EYE ON THE PIE: Security depends on flexibility, not stability

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In one word, what do we want? I suggest that word is security, physical and financial security. We want to live without fear for our lives or our livelihoods.

The atrocities of 9/11 made Americans more fearful about their physical security than they had been since the early days of World War II. Our economic condition feels insecure as jobs drift to other nations, as health care costs soar, and as both public and private pension plans are threatened.

To achieve security, many believe we must have stability. For some, stability is an absolute found in an unchanging social environment, a familiar world of tradition. Others will acknowledge change as long as relative stability is maintained.

For example, consider downtown as the center of commercial, government and social life in a community. Absolute stability is maintained by an unchanged downtown, one that looks and functions as it has since we were children. The same buildings, stores and churches are all downtown and as important as they were decades ago.

Relative stability allows for new buildings and new offices and stores downtown. But, despite whatever changes occur, downtown remains the focus of the community’s life. Yet few communities have either absolute or relative stability. Commercial life in Frankfort, New Castle, Princeton, Evansville and most cities has shifted to the outskirts of the old city. Downtown, despite all efforts to the contrary, has become a specialized district within the city. Some point to Indianapolis as an exception, but the share of economic activity in downtown Indianapolis is less today than it was 30 years ago despite heroic and successful efforts.

Nonetheless, many of our cities have more economic security today than in the past. Stability is not necessary to security. Keeping things the same often leads to decline, decay and destitution. The key to success is adjustment to new conditions.

Recently, I attended a conference concerning the state’s economic future. One speaker had a most important message. Playing off President Bush’s “leave no child behind” slogan, this presenter put up a slide saying “leave no child inflexible.” The persistent attribute of success is flexibility. You may be excellent at seeing what’s going on in the world, but without the flexibility to make necessary adjustments, you can’t take advantage of opportunities presented to you.

How does one acquire flexibility? It might be innate. It might be learned from parents. But it also can be taught. We might argue that our schools and our employers have the opportunity, even the responsibility, to teach flexibility.

There are at least two attributes of flexibility. First is one of attitude; the second is one of capability. Strong belief systems, allegiances and thought patterns are often considered favorable characteristics. But the line between strong and rigid is a narrow one that shifts over time.

For generations, Indiana insisted on the pre-eminence of its agricultural economy. Now, after the fact, the state has embraced its identity as a manufacturing economy. As the auto and steel industries go through their difficulties, many of our firms and workers have inflexible attitudes and capabilities. They cannot think of other markets for which they can produce, of other firms for which they could work. Many will not seek to learn even when the opportunities are available. Their education need not be formal with a certificate or degree as the proof of learning. Often, we can learn from other firms, from fellow workers, from materials at the public library, from the Internet.

But we will never achieve the security we desire if we believe a stable world is necessary. Security comes from the flexibility to be successful in the presence of instability.

Marcus taught economics more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mortonjmarcus@yahoo.com.

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