The new normalcy highlights basic business issues: what new operational implications now exist, what opportunities are emerging to grow markets and sales, what is going away, what is likely to emerge. As demanding as the questions are, there are attitudes and trends that can point the way to plausible answers. Approaching change with an open mind to possibilities and dangers has long governed the actions of savvy business leaders. The approach that succeeds in dealing with changing circumstances centers on optimizing circumstances. As stated by the legendary coach of the Green Bay Packers, Vince Lombardi, “The spirit, the will to win,” and “the will to excel are the things that endure.” In difficult and uncertain times, there's no avoiding the tried-and-true strategy of focusing on basic values. Peter F. Drucker argues that “concentration is the key to economic results.” So, too, are leadership, an open mind, calmness of purpose, and determination to weather tough times, and perhaps most of all right now, applying problem-solving techniques.

In the first two months following 9-11, the business community in the United States, and to a similar but lesser extent, in Europe suffered a tremendous shock. The U.S. GDP in the third quarter, already weak, shrank. Many businesses saw sales volumes near zero in the first week after the bombings and only slowly began to increase over the next two months, without reaching pre-9-11 levels. In the U.S., over 500,000 people lost their jobs in the six weeks following 9-11. Stock markets around the world shrank instantly in value by almost 15 percent. In October, when companies reported their third quarter earnings and signaled the market on the next quarter's prospects, the news was dismal in almost every industry. If we were to judge events by conditions as they existed in late 2001, we could easily decide that the best thing to do was to buy gold and drop out.

But that would not be the whole story. It has been America's long experience that all wars profoundly stimulate its economy, while at the same time changing in many ways how work is done. New opportunities present themselves and eventually outweigh the negatives while—yes— many old practices and business opportunities shrink. NCR's experience during and after World War II illustrates all these elements at work. And it is happening again.

The American government, which had set its course on shrinking expenditures before 9-11 and, indeed, had refunded taxes to the public, did a complete reversal in the first 45 days after the terrorist attacks. With nearly lightning speed, the Congress passed a $40 billion package to fund the initial round of expenses for waging war against terrorism and to provide financial relief for airline companies, which particularly suffered in the aftermath of the hijackings and bombings. As it became clearer in the fall that the economy had moved into recession, signaled by the very sharp increase in the number of unemployed, the U.S. government began to design an even larger stimulus package than the initial $40 billion. If someone had asked a member of the Republican administration six months earlier whether they could ever imagine asking Congress to spend over $140 billion on stimulating the economy and pushing the government into deficit spending, they would have said, “No way, not in a million years.” But that all changed after 9-11.

If the past is any indication of things to come, most if not all the new stimulus money will be spent in the United States. Because it will be aimed at certain sectors, the effects will be focused and dramatic. A couple of examples illustrate the point.

The anthrax scare prompted the U.S. government to order millions of pills at a cost of 95 cents each, thereby injecting millions of dollars into the pharmaceutical industry. At the same time, a growing concern over the possibility of smallpox and other diseases created new opportunities for this industry to sell millions of doses that had not been projected in sales for 2001 or 2002. In fact, the problem they had was how to increase production beyond normal levels.

Securing telecommunications infrastructures became an overnight opportunity for computer services firms around the world. The IT industry, which was having a lackluster year in 2001, suddenly found that companies and government agencies wanted to beef up the security of their networks and information processing systems. Quickly, it looked like demand was reaching gold rush proportions, but without much publicity, because no organization wanted its customers and stockholders to know that some vital systems perhaps were anything but perfectly secure. Just as pharmaceutical firms had to find new ways to make more doses faster, firms providing high-tech services faced a parallel challenge to protect the nation's information infrastructure.

There was a precedent involving penicillin during World War II after American health officials concluded that it was an effective treatment for infections, a problem faced by wounded soldiers and civilians. In 1943, only a few thousand doses could be manufactured. Pharmaceutical firms were then put under enormous pressure to find a faster way to make more. By the end of the war, they had succeeded, producing tens of thousands of doses. To do that, they had to fundamentally change production processes. As a result, after the war, these firms could keep up with the worldwide demand for this miracle drug.

We would argue that the American experience is on the side of optimism in the face of tough times and crises. But positive results can take time. In the 1930s and early 1940s, it took time and a war to solve the unemployment crisis after the heroic attempts by the Roosevelt administration to end the Great Depression initially failed. World War II changed everything within a year of America's entry into the conflict. The demand for soldiers, government employees, and workers to manufacture goods, grow food, and perform services essentially created a zero unemployment situation. The demand for labor propelled millions of women into the workplace, filling jobs that historically had been held only by men—in manufacturing, auto repair, construction, and munitions plants. Wars do that by stimulating military and secondary demands that expand the work force, often in ways new to the economy. What woman in 1939 would ever have thought that, in a few years, she would be building B-17s? Or assembling machine guns?

Manufacturing was transformed. During the 1930s, the IBM manufacturing plant in Poughkeepsie, New York, made accounting equipment. During World War II, it made rifles and handguns with IBM emblazoned on their barrels. NCR manufactured Norden bomb sights that made it possible for B-17s to drop payloads on enemy cities from high altitudes. Examples of transformation spread throughout an economy adjusting to new realities, as happened in one way or another during the Civil War, World War I, and the Korean and Vietnam Wars. The IBM example personifies what happened.

Thomas J. Watson, the head of the company and an unabashed patriot, assured the American government that his firm would make all its services, assets, and people available for the war effort. Of course, he also knew these services would be paid for but, that point aside, what counts is the results. When Watson's executives and government officials in the War Department looked at what IBM was good at, both concluded that this company had precision machining skills, knew how to mass-produce complex metal products, and had fully staffed factories already in place. With that set of capabilities, it was not a huge reach to conclude that instead of making metal parts for accounting equipment, IBM could make metal parts for rifles and handguns. And just as the company knew how to put little metal parts together to make business machines, it could also put little metal components together to make weapons. The same kind of transformation from civilian to military goods took place across the economy, as is occurring today.

Specific changes that constitute improvements also spring up, as with cockpit doors. For years, safety experts had been trying to get U.S. airlines to replace their lightweight, flimsy cockpit doors with secure, bulletproof ones, like those the Israelis insist their airlines use. American firms balked at the cost of the doors and the additional fuel consumption to carry the extra weight. Companies selling the doors just could not make a sale. Then came 9-11, and essentially, the American public said, “We won't fly with you until you fix your doors.” U.S. airlines got the message and immediately began refurbishing most of their fleets with new doors.

The nature of work itself was already undergoing significant transformation over the past several decades as a backdrop for the impact of the new normalcy. The ways in which it is already influencing these trends are likely harbingers of what will emerge. Historically, three long-term trends stand out.

The first has been the shift from traditional manufacturing jobs to what economists call service sector jobs. Much more than waiters, cab drivers, and hamburger flippers are included. Add doctors, lawyers, engineers, architects, consultants, and senior executives. Even in most manufacturing companies today, the percentage of people who physically make things is often less than 10 percent of the employment rolls; in high-tech companies, it is often less than 5 percent. So the number of people who hammer, bend metal, and assemble has been shrinking as a percentage of the total work force, while service sector jobs requiring technical skills have been increasing.

These service sector jobs involve a second economic trend, the rapid increase in the reliance on computing as an integral part of how work is done. PCs, telecommunications, and now the Internet represent the most visible and obvious examples of where work is headed. Today, over 65 percent of all workers use computers in one fashion or another, up from less than 40 percent 15 years ago. A less obvious (and related) trend has been the ongoing shift of work responsibilities to robots and computers in general. The shift began with robotic devices that paint cars and with drafting systems that design parts of products by performing the necessary calculations and making decisions regarding them. Next, computers conducted transactions, such as automated telephone conversations. Other systems automatically decide where to reroute trains, control movement of natural gas through pipelines, and adjust manufacturing processes in response to changing conditions. This shift to computers in getting work done and making decisions has occurred across numerous industries in both the service and manufacturing sectors.

The third major trend is the shift of technologically sophisticated work to employees in the U.S. and of less skilled work to other countries. The change in who does what and in what countries also has led to a more mobile work force. People in the service sector and highly skilled workers can and do move from company to company more quickly and more easily than ever before. The flip side is that, as work moves overseas, companies hire and fire more readily, as circumstances dictate.

In wartime, every nation wants to locate within its borders all the capabilities it needs to avoid depending on others for critical supplies. In the 1980s, some American leaders worried when Japanese computer chip manufacturers increased their world market share at the expense of American suppliers. They feared that if the U.S. went to war, the Pentagon would have to rely on the Japanese to provide components for advanced weapons systems. However, the market turned around in the 1990s, as U.S. suppliers introduced a whole new generation of computer chip technology. U.S. chip manufacturers now make the most advanced products, while the Japanese and other overseas producers make less sophisticated chips. The age-old concern about having all the necessary capabilities remains, raising serious questions: Does the United States have all the assets it needs to support a war effort? Will it have to rely on allies for critical support, some of whom may waver over time in their backing of a war effort?

Nonetheless, while there are no guarantees in any war, particularly a global, decentralized struggle against terrorism, the U.S. is in a strong position. It makes more food than it consumes and has one of the best trained, technologically equipped work forces in the world. Add its formidable size (over 100 million). During the 1990s, the nation's businesses strengthened themselves by trimming fat and waste in many industries and by upgrading technologies. So we entered the war against terrorism in better economic shape than in any other war, with the possible exception of the Vietnam War (which began after the nation had just experienced over 15 years of outstanding economic and technological advancements). In contrast, at the start of World War II, an observer could have stressed the negatives in worn-out factories and a work force scattered due to unemployment. Still, the country was able to modernize, organize, and out-produce all other nations in the war. Rather than making a jingoist statement, we are pointing out that the country and its economy have latent vitality, which economists and social planners can fail to factor into an assessment of the outlook.

Despite fear and uncertainty, this state of the economy supports confidence and determination (but certainly not complacence). There are signs everywhere that the economy can do what needs to be done at the rate and volume required. At the same time, we also have the ability to invent or innovate new production and work processes to meet the demands of new circumstances. The combination of the two makes it possible to capitalize on new economic opportunities and to change existing procedures and types of work.

Overall, the nature of work is changing, and its future is already arriving to the point where we can stop, look, and identify what's happening. The directions are manifest. Individually, they signal change. Viewed holistically, they amount to a nationwide environment that is like the air we breathe or the water in which fish swim. It is taken for granted, always there, hardly visible from one Monday to the next. In times of crisis and change, we need to take notice of what is happening.

First, work is becoming increasingly technical. Computers are standard tools of any and all trades. Computers and other technologies will be used to automate and to perform ever more complex tasks. This entrenched process will speed up because war economies have an urgency that peacetime economies do not.

Second, there will be more jobs in those industries that directly support military activities: food production, weapons manufacturing, transportation, medical supplies, telecommunications—everything the Pentagon needs to wage war and government agencies need to protect the homeland. At first, it is business as usual in the way things are done, but soon, processes, operations, and even organizations morph as circumstances dictate. Out of such transformations, new types of work appear and, thus, new job opportunities. Such opportunities replace jobs that go away.

Third, it is quite possible that economic globalization may slow down as the physical movement of merchandise and service sector people declines in the face of potential dangers and shifting demands. If that happens, existing regional trade arrangements become more significant, such as more trading within the boundaries of NAFTA or the European Common Market and less from one trading region to another. The one major exception, and it could be an enormous one, is trade resulting from the military needs of allies. If, for example, Lockheed makes a military aircraft that is adopted as the standard by armed services in Europe, then its planes will be traded within the Common Market. Since aircraft now cost millions of dollars and in some cases approach a billion dollars per airplane, the amounts of money involved are enormous.

Meanwhile, lesser areas of trade could suffer. The overheated 1990s banana trade problems between the U.S. and Europe can be seen as a harbinger of problems for other products in the global economy. Slowdowns can hurt industries dealing in luxury items, such as jewelry and exotic foods, books, paintings, clothing, especially those from the Middle East. Trade will slow down in products deemed of significance to national security, such as medicines (e.g., smallpox vaccinations), advanced computer systems (which the U.S. blocked from being sold to the Soviets during the Cold War), and raw materials needed to support military and civilian defense needs. These include fuels of all kinds, ores of all types (e.g., iron, zinc, copper), and possibly even foods (in our case, grains and cattle). It echoes what happened during World War II.

Fourth, national assets used for the development of new knowledge and products, such as universities, government research laboratories, and company R&D facilities, would have their work agendas shaped more by government priorities than by economic opportunities. This trend would create new jobs and at least change the focus of work for some people, as they develop new materials, foods, medicines, and technologies. For others, it will mean operating in larger organizations as the appropriate setting for large tasks with high national priorities.

This shift in work and priorities takes place in two established ways. The U.S. government, through existing agencies, the most important of which is the National Science Foundation, already funds a high proportion of basic research in the United States. Just by shifting its funding priorities, the government can prompt research organizations to change theirs in order to win grants. Government purchases are a second powerful influence upon the workplace and marketplace. The federal government remains the single largest customer in the U.S. economy and has been since the end of the 1920s. Such was also the case in every war, with the exceptions of the Spanish-American War of 1898 and all wars and conflicts prior to 1845. Within the U.S. government, the largest single buyer is the Pentagon. Put another way, the American government uses up 18 to 19 percent of the national GDP in peacetime, a percentage that increases in wartime.

Fifth, as individuals, we should be prepared to pursue multiple careers, rather than one lifelong career. This process began in the 1960s as the economy shifted increasingly from manufacturing to services and as whole new industries came into being (such as software). By the 1990s, the outlook for the “average American worker” was changing dramatically to employment at several companies during his or her lifetime and pursuit of two or three fundamentally different careers. New workplace demands, opportunities, and circumstances all drive the process by which new careers and jobs emerge and old ones go away. While it is difficult to forecast the specifics, it is not difficult to recognize the reality. Accordingly, changing our mindset to match this reality can be viewed either as an opportunity or a calamity. Given what historian David S. Landes told us about historical processes, opting for the optimistic view puts us in a position to be on the winning side of jobs, careers, and history.

In all probability, the disasters of 9-11 will speed up the process of decentralizing work that is already widespread throughout industrial societies. The process was well underway before the Internet made mobile work possible for all types of service and white-collar jobs. In reflecting on the fact that thousands of people work in high-rise structures around the world, we think of what happened on September 11 in the World Trade Center and ask, Does this still make sense?

The traditional arguments in favor of centralization are familiar. Concentration of employees optimizes the use of scarce land in downtown cities and makes it possible for people to communicate and collaborate efficiently. It brings prestige to a city and symbolizes a nation's prosperity. But as we saw with 9-11, the destruction of a towering office building can wipe out 50 or even 75 percent of a company's employees in a centralized operation. In the aftermath, many New York financial organizations announced that in finding replacement office space, they were going to scatter their employees across multiple buildings. Neighboring New Jersey was an immediate beneficiary after 9-11, gaining 15,400 jobs in October alone.

The shifting of work from one state to another and from one country to another is pronounced in the American economy. The creation of NAFTA accelerated the process as high-tech work clustered in the U.S., while low-paying, unskilled work tended to migrate toward Mexico. The process is global as, for example, in the shift of computer chip manufacturing to Asia. Today, in a reflection of decentralization, no industry in the “advanced economies” builds factories with 30,000 or more employees. The economics of factory building and management suggest that a more optimal size is normally under 10,000, which means that, as economies and industries expand, there are more factories and offices scattered around the world.

For Americans, there are economic incentives to decentralize work forces as fewer companies concentrate thousands of employees in one location or high percentages in tall buildings or even in sections of a major city. Companies and government agencies have good reason to do so and not only for security. Decentralization enables companies to stay in closer touch with the customers and communities they serve. Thanks to the information infrastructure, decentralization works smoothly, as telecommunications and computer technology carry the process further, making telecommuting feasible. In the U.S. alone, over half the homes are connected to the Internet; over 90 percent have telephones. High-speed telecommunications exist in every community in America, eliminating distance as a management problem.

The process has been spreading for several decades, even though, historically, industries tended to develop in one geographic location for the convenience of suppliers and employees. Automobile manufacturing, for example, was once concentrated in Detroit; now, factories are scattered across the nation. Tennessee has become a major auto producer. New York City, historically the center of clothing manufacturing, has been joined by foreign manufacturers. Well over one-third of all clothing in America is imported from as far away as China and Israel. As the banking industry rapidly consolidates into huge enterprises, made possible by telecommunications and computing, headquarter facilities are dispersed. Online banking, in particular, is available across the nation; branch offices are widely scattered. ATMs provide access to accounts of multiple banks through a single machine that accesses banking networks.

Families can live and work just about anywhere, whether they earn their income in service or manufacturing, as the U.S. population disperses throughout all 50 states and urban centers expand faster than the population. We now have cities, such as Austin and Phoenix, with more than several million residents that, even 20 years ago, were far from qualifying as urban centers. This trend, actually underway since the late 1800s, has so far shown no indication of slowing down. Good highways, extensive air transportation, and far-reaching communications, along with an ample supply of workers (often new ones in the form of immigrants), have made this historic trend possible. The resources have been there to make it possible—the nation's supply of clean water and the ability to produce more than enough food to feed itself.

The new normalcy is bound to stimulate the dispersal of work across the nation for security reasons alone. Since the process is already underway for sound economic reasons, it is likely to accelerate in those industries that have remained too concentrated, such as the financial sector in New York. The U.S. government will probably follow suit, in keeping with the dispersal evident in the 1970s and 1980s, as members of Congress use their influence to shift federal facilities and activities out of Washington, D.C. into their districts for political reasons.

The new normalcy has already meant more physical security in public and commercial buildings as the war on terrorism expands security efforts. Actually, security concerns are not new. Unnoticed by the public, corporations have long been concerned about the kinds of security issues that Americans are now hearing about. For decades, large companies have been the subject of attacks, scattered and targeted, but nonetheless real and frightening to those directly affected. An incident in a Midwest city, another in South America, a third in East Asia become grim reminders of the need for vigilance. Multinational corporations have received the message and have developed company-wide strategies for protecting themselves.

From kindergarten to college campus, from factory to research laboratories, from government buildings to branch offices, America no longer takes security for granted. Strangers can't enter buildings without showing badges, getting passes, or being escorted. In the 1990s, quietly and without fanfare, concrete barriers went up at entrances to offices and factories to prevent terrorists or disgruntled employees from smashing vehicles into these buildings. There is hardly a major office or factory in the country that does not have little cameras mounted on corners, in lobbies, and over entrance ways that feed continuous video images to a security office. Companies began installing these in the 1980s. Corporate and government employees receive several communications each year with guidelines on how to protect information, keep secrets, and secure laptops and other assets. An eerie reminder for everyone was the U.S. Post Office advisory on protecting ourselves from anthrax.

At city, state, and federal levels, government has assumed an increasingly proactive role in maintaining security. Where lapses or breakdowns occur, response is immediate. Measures have been taken to use digital and other technologies to improve tracking of movement into and out of the country. Within weeks of 9-11, Congress provided extensive surveillance powers to law enforcement agencies. While such powers make some Americans uncomfortable for constitutional reasons, survey after survey finds the public willing to tolerate this as part of the new normalcy. Similar powers and practices, which have long existed in other liberal democracies in Western Europe, Israel, Japan, and Australia, have proved to be effective. Clearly, what counts with a security-minded public is taking actions that work.

For decentralized workers, who rely on telecommunications and travel, this means less privacy and more tracking of their movements. It is a relatively new experience for Americans but mainly of degree. For decades, there has been a steady buildup of accessibility to personal information about finances, spending, travel, and debt. The failure of government agencies to share information in an organized way reflected America's aversion to a society in which “Big Brother is watching.” The breakdown in sharing was evident in the aftermath of 9-11, when it turned out that government agencies were not exchanging the wide-ranging information about the movements and activities of suspected terrorists. Increased surveillance and coordination require adjustments as computer and telecommunications technology facilitates the integration of information, although more slowly than law enforcement officials would like. The task is not easy.

As industries and the American work force decentralize, information about people, data, and activities is centralizing. As the process broadens, we can expect renewed discussions about personal freedom, privacy, and constitutional protection, because the new normalcy will bring these issues to our attention. If history is a guide, there will be some extreme intrusions, which the courts will knock down, while additional monitoring of personal activities and information becomes a part of the new normalcy. Security comes at a price. The adjustments will transform and expand the federal government's role in the way Americans work, in the taxes they pay, and in how funds are used.

The new normalcy has already enlarged the role of the federal government in ways that would have been inconceivable before 9-11. Normally, we think of government expanding during Democratic administrations and shrinking under Republican control. In fact, all during the 1990s, while President Clinton and the Democrats ran the government, public expenditures and employment at the federal level declined. During the Bush administration, the reverse occurred after 9-11, despite Republican aversion to federal spending and an expanded federal role. Security needs alone forced the national government into playing a more active role: more military, more criminal investigations, greater airport security, more investigations of bioterrorism. The list keeps growing.

A similar pattern emerged at state and local levels. The first signs appeared when overtime costs ballooned spending for police and fire protection, followed by the need to add staff to handle security. When and if security problems worsen and wartime needs expand, we can expect government agencies at all levels to grow and spend more across the entire economy, forcing a shift in resources from the private to the public sector.

Another trend centers on government's role as shaper of the nation's priorities and leader of the public's responses to crisis. In times of uncertainty, we invariably increase our trust in and reliance on public officials. We look to them for direction, what the press and commentators call leadership. One reason Mayor Rudy Giuliani became so popular nationally (even internationally) in the weeks following 9-11 was the way he came across as a leader. The nation saw him repeatedly on television at the scene of the 9-11 disaster and heard him repeatedly reassuring the country and providing guidance on how to respond. During the Great Depression, President Roosevelt became a popular leader for doing the same thing. His signature statement became “The only thing we have to fear is fear itself.” During World War II, he gave the nation direction: “We must be the great arsenal of democracy.” During uncertain times, guidance and leadership become a major function of top government officials, constituting a major national asset in times of crisis.

In pointing the way, leadership animates the country and lets everyone know what to focus on and why, thereby leveraging the assets of the economy and the support of the public. It is a hallmark of democratic government in mobilizing its citizens. In any democracy, the role of government leaders is clear: to persuade the public to embrace specific programs by tapping the fundamental values of the nation. Roosevelt's overriding message in World War II spoke to the basic American belief that the nation had a historic mission to foster democracy and freedom around the world. Americans heard and answered the call.

In addition to becoming more involved in security and playing a heightened leadership role, governments expand their control of economic activities in uncertain times. Essentially, four activities take on greater significance.

The first is economic policies that reside in programs introduced or expanded to stimulate specific objectives: creation of new jobs, control of inflation, encouragement or discouragement of foreign trade, and manufacture of goods needed to defend the nation.

The second involves tax policy. This is not limited to collecting more taxes to pay for larger and better equipped military forces, although this is clearly important and necessary. Tax policies allow governments to reinforce economic objectives, such as stimulating the creation of new jobs and encouraging the public to spend or save more. The U.S. government has long recognized the powerful influence of tax policies on institutional and personal economic behavior, a sensitive feature of any capitalist system. While economists have long argued that the effects of U.S. tax policies take more than a half year to actually kick in, the American public reacts immediately by changing its economic behavior to take advantage of anticipated changes. As the new normalcy takes hold, we can expect changes in tax laws to have more dramatic effects than in peaceful times. In 2001 alone, that already happened.

Third, the federal government spends more money. In every war and even in periods of recession and depression, doing so “buys” the nation out of problems. The highly influential British economist, John Maynard Keynes, argued in the 1920s and 1930s that modern economies could best be managed by a more proactive government role in economic affairs. This involves managing classic market forces, even in free enterprise economies, to deal with recessions and depressions and to provide safety nets for those in need.

The Roosevelt administration in the 1930s adopted Keynesian economics hook, line, and sinker, as has every administration since then. President Lyndon B. Johnson funded both the Vietnam War and his Great Society programs simultaneously by driving up the national debt. President Ronald Reagan did essentially the same thing as he sought to outbid the Soviets in an arms buildup. U.S. governments have not hesitated to spend in times of crisis, and the national economy has normally been strong enough over a long enough period of time to handle the increased debt. Such is the case today, and we can expect more of the same in facing up to the new normalcy, although it means taking money out of the economy that consumers might spend on cars, appliances, redecorating, and luxuries.

Fourth, money is used as a weapon. This tactic, used in times of both peace and war, is called foreign aid, one of the most misunderstood uses of money. It is designed to do basically two things: reward some nation to do something the U.S. wants done or as an economic incentive to have another nation work with the United States. A current example of the first use is the construction of roads financed by the U.S. so that military vehicles can move around in an underdeveloped country. An example of the second is the post-9-11 aid to Pakistan to encourage its participation in the fight against the Taliban. A variation of both objectives is aid for political and moral reasons, such as food to an area hit with a natural disaster.

Foreign aid is administered in a variety of ways. Most Americans think it is handed over to governments as cash and checks to spend as they wish. That is not normally the case. Usually, money is earmarked for specific projects, often managed by international agencies or with a variety of audit controls in place. Another way is to provide credit to be spent within the U.S.—for example, to purchase weapons made by American firms, but not for military items manufactured by a third country. The same applies to grants for medical supplies and earth moving equipment. This has the double effect of providing a grant for political reasons while creating jobs and pumping money into the U.S. economy. Normally, foreign aid represents a tiny portion of the U.S. government's budget—less than 1.5 percent—even in generous times, but it gets more negative publicity than just about any other public expenditure. Yet, it remains an effective and popular tool used by government in uncertain times. Understanding how foreign aid is expended gives companies and individual entrepreneurs valuable insights into opportunities for new sales to other countries. It is also part of understanding how the recent past shapes and influences policies and practices in dealing with change.

There is a saying Ecuadorian Indians use to describe life that fits the current situation: “When you put your hand in the river, you forever change its flow.” We cannot reverse what has happened. We have to respond and react. Our hand is in the river. As change begets more change, nothing remains fixed, and the water flows differently. That means old practices will disappear, and new circumstances will make new demands and deliver new opportunities.

Rather than guess which businesses and enterprises will win or lose over the long run, clearly an unrealistic exercise when things are changing so quickly and so unpredictably, a review of key influences on winning and losing in the short term is more promising. We can look first at how people respond to increased restrictions on freedom of movement and threats to their security. As air travel becomes more time-consuming because of security checks, alternative forms of transportation become more attractive, such as train service between New York and Washington. If we were travel agents, we would think about becoming experts on rail and bus travel. We would look for travel arrangements that provide a secure environment. We would look for solutions that speed up and streamline how things are done in the new (not the old) normalcy. We would do so in a society where “time is money” and where the business culture rewards cycle-time improvements.

With regard to security, the issue is less about selling more guns and gas masks, although many businesses are doing that, and more about spotting clues to new directions in needs and wants. In the weeks after 9-11, for example, real estate agents and bed and breakfast owners reported a sharp increase in activity as people from large cities either sought a refuge from urban centers (which seem to be targets) or looked for short vacations that did not require flying. Does this portend a new flight to rural and small town America? Does this suggest more vacations by car within the U.S.? Does this foreshadow an increase in job searches in the U.S. heartland? How much do we factor in the maturity of the Internet and the enormous shift in how work can be done online? Clearly, jobs and careers can be dispersed across the nation in ways unimaginable a decade ago. Ingenuity-driven opportunity knocks for telecommunications, computing, real estate, the battered entertainment and travel industries, and home furnishings. Demographic shifts will be inevitable as a by-product of concern about security and the cost of living in expensive cities, not to mention the aging of the U.S. population.

Meanwhile, manufacturing firms and large service enterprises that respond to the newly expanding needs of U.S. government agencies will find manifold opportunities driven by war and homeland security programs. The question, How can we serve the market? quickly became a hot issue for businesses. As unemployment increases, government programs are likely to subsidize job-producing activities and offer opportunities to hire more people without the full burden of salaries. Linking hiring initiatives to defense and security considerations holds further promise of economic activity.

What doesn't represent an opportunity? The short answer is anything that runs contrary to what is happening in the economy and to what the public needs and wants. As public confidence about job security declines, major acquisitions, such as cars, appliances, and furniture, will be put off as much as possible. Even home purchases are vulnerable to a decline, despite mortgage costs that have not been so low since the early 1960s. Why? People do not want to be saddled with increased debt in uncertain times. As to government exhortations to shop in order to stimulate the economy, they run up against the fear factor. Americans who are afraid of losing their jobs are not going to run out and buy a new car.

Among U.S. companies, fear of declining revenues and shrinking profits demonstrated its chilling effect even before 9-11. Firms in many industries reduced capital expenditures and much of their discretionary spending for consulting, meetings, training, and travel. As with the American public, unnecessary expenditures were being cut back with a nervous eye on the bottom line.

In pursuing opportunities to sell goods and services, an economic pullback suggests that the prospects for small expenditures are better bets than for large ones. Redecorating a kitchen may be out, but not new curtains. Buying a new car may be postponed, but not necessarily a DVD player. A trip to Paris may be out, but not one to Montreal. Even usually impregnable wealthy Americans are backing off conspicuous consumption as the nation's mood shifts from self-indulgence and excess toward prudence and moderation. This does not mean that people will stop going out to dinner and on vacation, but they will go out less often and to less expensive places, and will look to economize on their vacations. At home, they are more likely to cut the lawn, rake the leaves, and shovel the snow themselves. It is up to opportunity seekers to look around and take advantage of the trends and changing attitudes in society as careful replaces carefree.

We can expect increased demand for solution-seeking among both companies and individuals. In uncertain times, individual Americans focus not on overnight wealth from dot-com IPOs, but on guidance in how to conserve what they have and in how to spend less. One example is the surge in refinancing mortgages—which has kept bank officers busy. Or the tendency to repair the family car, rather than trade it in for a new one, meaning more business for car mechanics. Terrorism, with its ruthless reminders of mortality, prompts people to put their affairs in order— which leads to appointments with insurance brokers to write policies and with lawyers to write wills. The equivalent in company life is the pursuit of economies (limiting travel, limo rentals, hiring, purchasing, and bonuses) and the search for sound, long-term decisions on a range of crucial business issues—expansion, cutbacks, layoffs, mergers, business partnerships—all of which demand a range of services from accounting and law to consulting and outplacement.

Successful craftspeople apply a strategy of flexibility in their respective fields of business. For instance, iron workers who know how to put up steel staircases in buildings learn to install aluminum balcony rails, then to do ornamental brass work for a hotel lobby. It is all work with metal, but with a difference that involves getting in sync with the marketplace. If buildings are not being put up, then remodeling lobbies can replace putting in staircases. For some, work flexibility can involve additional training, an advanced degree, or a change of career (drawing on skills, aptitudes, and interests). It can mean transferring what we have to offer from one industry or type of organization to another, such as an accountant interested in classical music changing from administering salaries and benefits in a manufacturing plant to become a financial officer for a symphony orchestra. A public school teacher becomes a trainer for a consulting firm, an editor of a trade magazine becomes a Web site editor, a medical doctor becomes an executive at a pharmaceutical firm. Similar skills and/or interests, different venues.

By focusing on our strengths, we can identify our role in society and find a place where we can make a contribution. Self-awareness draws on an old American value, self-reliance. It counters a sense of vulnerability with a strong dose of personal responsibility in taking charge of our individual destinies. Essentially, Benjamin Franklin was referring in 1757 to this American value in the quaint language of the eighteenth century when he stated, “He that hath a trade hath an estate and he that hath a calling hath an office of profit and honor.”

Flexibility, adaptability, and a sense of responsibility constitute an optimistic response to the major changes of the past 20 years in the American economy. The changes surround us: the effects of the Internet on business organization and practices; the increased turnover in jobs and careers that the “average” person is experiencing; the changing skills required to perform desirable jobs; and the rising requirements for undergraduate, graduate, and other forms of credentialing just to rate an interview, much less to keep a job or to get promoted. When jobs turn over, as in the recession of 2001 and especially after 9-11, a form of musical chairs gets played out in the workplace. Just as in the children's game, if you do not find a seat, you are out of the game and must watch while the others keep playing. At a party, that means being left out of the fun; in real life, it is a financial disaster and a personal crisis.

As we argue throughout this book, churn has been increasing. 9-11 probably has heightened the tempo and certainly increased awareness of change at every level of American life. That is why it makes sense to take stock of what we are good at and leverage our skills by holding jobs that play to those strengths or by seeking employment that does. In the final analysis, finding our way at work is a solo flight in the sunset of a secure bygone era of one lifetime career, one company, one job. More than ever, individual men and women are on their own in a competitive global environment, just as companies are.

It is appropriate to borrow the concept of core competence and apply it to ourselves as individuals. What we know and can do is what counts. Experience on its own has become an increasingly unreliable asset. We can no longer feel that longevity guarantees security for the individual or survival for a company. Just as breakthroughs, takeovers, and new technologies can endanger companies blocked by inertia, so can new methods, techniques, products, and services endanger jobs and professions that are taken for granted. The subtext of change can become obsolescence and displacement. Or it can translate into new opportunities. If we cannot continue to thrive by manufacturing cash registers (in wartime) or motorcycles (in peacetime), we need to identify and act on what we can do to meet the needs and wants of a rapidly changing marketplace in a global, decentralized environment. Fortunately, as we will discuss in the next chapter, America has the human, physical, economic, and technological resources to respond to the challenges we face—a portfolio of reasons to support optimism.