The Leadership Insider network is an online community where the most thoughtful and influential people in business contribute answers to timely questions about careers and leadership. Today’s answer to the question: Career wise, is it better to be book smart or street smart? is written by Arthur Pinheiro Machado, CEO of Americas Trading Group.
Business, like the stock market, is transitory and cyclical. The equities, commodities, and the value of oil all fluctuate between rapid and slow growth. The fashion industry offers incredible modernity but also returns to vintage styles. Trends depend on social, economic and cultural factors, and they operate in cycles. And the labor market is the same. Demands and expectations for employees also depend on economic and social factors, and they too are cyclical. But perhaps most important, planning a career to a certain extent, requires us to foresee how society will develop in the years ahead.
Automation and outsourcing have cut the number of jobs in the industrial sector, with a shift to the service economy (which in the United States accounts for around 80% of the workforce today). Within the service economy, we have what we call the “knowledge economy,” which embraces the financial, technological, and scientific markets. The service industry functions as the key driver of the economy, in addition to traditionally providing the best-paid jobs, such as lawyers, financial industry professionals, doctors, etc. However, unlike when the economy shifted from agriculture to industry during the Industrial Revolution and only unskilled workers lost their jobs, now the most skilled positions are being taken over by computers.
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The result is that highly qualified people are now, to a certain extent, commoditized. They end up earning less than entrepreneurs, financial wizards, and even senior managers. We are experiencing the era of technological entrepreneurship, and “street smart” is becoming more fashionable than “book smart.” Grasping this shift to a more technologically-savvy world may be the key to creating innovative products or markets with great potential.
However, this doesn’t mean employees should focus on being street smart and forget about being book smart. As emphasized by Sigmund Freud, every choice we make implies relinquishing something, and so we must also understand what it is that we are giving up. Being book smart implies a sound education and essential business habits, such as the discipline to enter into a profound technical discussion, the development of a process for making long-term decisions, and the creation of critical facilities in relation to models and society.
So what is the ideal profile? When there’s no strict formula for success, the best strategy is to understand your own strengths and use them to your advantage. Why should someone who is highly educated not possess an entrepreneurial spirit, and vice versa? Successful businesspeople in the 21st century will be the ones who are constantly developing new skills and are able to adapt to ever-evolving social and economic cycles.
