A Different Knowledge Economy
By A.D. Freudenheim  

17 May 2004

At a recent meeting with a client, to discuss methods for improving relationship-building with corporations, someone asked a question: how can we build stronger relationships when the people we meet seem to rotate out of their jobs every two years or so?

Changes in employment patterns have been much discussed and analyzed, particularly in the late-technology-boom (and subsequent bust) period. One area of focus has been on job stability, and contrasting numbers suggesting that people may or may not be switching jobs more frequently, or remaining at each job for a decreasing number of months or years. For example, an article in The Economist from January 2000 looked at whether and how work patterns and time frames are changing, relative to the last twenty or so years; it’s conclusion was that change is happening, and that “...workers, high or low, [you] are on your own. It may be time to start building your ‘brand’ and getting out there to network, network, network.”[1]

In November 2001, Peter Drucker stated, in a series of articles also in The Economist, that “What is already clear, however, is that the emerging knowledge society and knowledge economy will be radically different from the society and economy of the late 20th century...”[2] Despite the former article’s admonition to “network,” and the latter’s evaluation of the so-called “knowledge economy,” most of the analysis in these and other articles have focused on the changing environment for both employees and employers, the competitive cycles needed to woo and keep recruits, and the difficulties, for employees, of staying educated enough to remain employable as the focus of the economy shifts.

However, the challenge of networking is not just one of recent history; look at the different and increasingly-flexible systems for tracking contact information, which may have begun with the Rolodex, invented in 1958[3], and in recent years evolved into the Palm Pilot and online tools like Plaxo.com. Although all of these systems may have practical, social uses, the motivations were clearly business-driven: the need to keep one’s network up-to-date. There have been research papers that discuss the value of networking generally (such as Peter Oreopoulos’ The Long-Run Consequences of Living in a Poor Neighborhood), or papers looking at the impact of technology on how people network (like Getting Closer or Drifting Apart, by Tanya S. Rosenblatt and Markus M. Mobius)[4]; there does not seem to be much research on the specific impact of job-changing as it relates to networking. “Knowledge is power,” said Francis Bacon; what Bacon did not address is what to do when your knowledge is suddenly out of date. Anyone who has worked for a firm with a common contact list, employee directory, or even “customer relationship management” software, likely knows that keeping this information fresh can be a big challenge.

Even if one keeps track of a contact’s movements from job to job, these rotations – especially over short periods of time – likely diminish that contact’s value within the network. After all, person’s ability to assist you is predicated in part on the strength of their own relationships; those relationships are likely less strong and less substantive the shorter the period during which someone worked in a given place. Moreover, if what is desired is access within a specific company, an individual may lose even more value as part of a network once they no longer work at that targeted firm.

Few people will make decisions about employment based on their value as a contact to others, nor should they. But in an environment where job-hopping is common – especially among the “knowledge workers,” as Peter Drucker would call them – there must be some degradation of our collective ability to network effectively. Steadiness in holding a job should be a desirable value, because it says a lot about one’s working abilities and priorities, not to mention an ability to make a commitment, something employers typically see as positive. The flexibility of our economy to handle these job changes has proved mixed – some industries survive better than others, as do some people – but it seems obvious that all this jumping around may have negative consequences, not only in how much people can learn (or do) in such short periods, but in the long-term value of the “social” network they are able to build.

The challenge my client posed is real. How did I answer the question? I said that in a business-to-business relationship, the challenge faced by the turnover of staff at a target company can be overcome by developing multiple, multi-faceted relationships, so that no one individual is the only point of contact. Moreover, depending on the nature of the business relationship, a visible, tangible record of this connection can be left behind, so that the next person in the job has access to information that can help them, and provide them with any necessary history. Nonetheless, numbers indicating that as people age they tend to remain in their jobs longer may be welcome news for network-builders; a study evaluating the strength and skills needed to build and sustain such networks would also be welcome.

[1] “Career evolution,” The Economist, 27 January 2000
[2] “Survey: The Near Future,” by Peter Drucker, The Economist, 1 November 2001; from the section titled “The new workforce.”
[3] “Rolodex Inventor Alfred Neustadter,” as researched by Mary Bellis and published by About.com
[4] Both of these papers are available through the National Bureau of Economic Research, at nber.org
  Copyright 2004, by A.D. Freudenheim. May not be used in whole or part without written permission. However, you may link to this page as desired! Contact A. D. Freudenheim for further information.
This page is part of: The Truth As I See It.