Cover Image: Illustration by the author. Background source: US National archives via Wiki

The hidden cost of not improving enough

“An investment in knowledge pays the best interest.” — Benjamin Franklin

Are you familiar with the concept of inflation?

If not, here’s Investopedia’s definition:

Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over some period of time. It is the rise in the general level of prices where a unit of currency effectively buys less than it did in prior periods. Often expressed as a percentage, inflation thus indicates a decrease in the purchasing power of a nation’s currency.

Here’s how it affects the price of coffee, for example:

And here’s how inflation happens:

Melissa Ling {Copyright} Investopedia, 2019

Inflation is good for some people and bad for others. Those who don’t increase their income level enough get poorer because of inflation, even if their income level hasn’t changed.

That last part is key when it comes to skill development. If you don’t learn enough, the world is getting smarter than you. You are getting poorer in knowledge due to skill inflation.

What is skill inflation?

Similar to inflation in economics, it’s the rate at which things are being learned. Reusing the format used for economics by Investopedia, here’s a definition of skill inflation:

Skill inflation is a quantitative measure of the rate at which the average level of knowledge in an economy increases over some period of time. It is the rise in the general level of skills where a unit of proficiency effectively is valued lower than it did in prior periods. Often expressed as a percentage, skill inflation thus indicates a decrease in the skill proficiency of a nation.

Essentially, it’s the same concept. I’ve bolded the only differences in the definition.

When a skill is rare and the demand for it is high, the value of that skill goes up. Over time, as the skill becomes less rare, or gets replaced by robots, the value of the skill goes down. The increase in the general knowledge of that skill make it less valuable overall. If you stop improving that skill, skill inflation will have caught up to you, even if you may have had a head start.

For example, if you learned to trade Bitcoins back in 2009, improved your knowledge for a year and then stopped, you are behind someone who just learned it last month. The general knowledge of Bitcoin accelerated over time and the number of resources on the topic has drastically increased.

This applies to most skills.

You can also see that with education. When almost no one had a college degree, having one was greatly valuable. You were almost guaranteed a high-paying job. Now that everyone has one, the perceived value is much lower.

In India, most people have a degree, yet they still struggle to find employment. The labour is too skilled for the demand. I remember talking to someone working in a supermarket in Bangalore. He told me he was an engineer but couldn’t find employment, so he was working there for minimum wage.

His skills didn’t exceed the skill inflation. He was stuck working at a job he was overqualified for.

To remain relevant, you have to beat the skill inflation

If you don’t improve enough, the general population or machines will catch up and make you irrelevant. Finding employment will become harder and you’ll feel like, as they say, a dinosaur.

If you’re currently employed and the economic context of your employer changes while your skills haven’t improved, you’ll be first on the line to get laid off. When you’ve done the same thing over and over for years, it’s hard to get back on the treadmill and skill up for work again.

You might be the best COBOL programmer in the world, but in a world where COBOL is irrelevant, so are you.

It’s a more dire situation than it seems

You’re a great driver? Good for you, but know that self-driving cars are coming, and they’ll be better than you could ever be. In a recent report, Business Insider predicted that as many as 10 million self-driving cars would be on the road as early as 2020.

Between 2000 and 2010, robots replaced 85 percent of manufacturing jobs.

You think you’re a kick-ass music creator and that you can’t be replaced? Think again. AI-generated music is already getting better than humans at music creation. It’s likely that within a decade, most of us will be listening to music created by an AI.

You think you’re a kick-ass artist and that you can’t be replaced? Think again. AI is already generating better art than you are. Within a decade, you’ll be visiting museums showcasing art created by a machine, not a human.

And if you also think that your programming job will still be valuable in the next few decades, well, you’re also wrong. Google already has its AI generating higher-quality code than their engineers.

Without action, no one is safe from skill inflation.

How to be ahead of skill inflation

There are two very important components to beating skill inflation: quantity and quality.

Quantity

Quantity is simple enough. You want to spend at least 5 hours per week on your self-improvement. Most people spend the majority of their time on high-stressed, “urgent” stuff, foregoing the really important activities that benefit them in the long term. Here is where you want to spend at least 5 hours per week:

By fighting fires constantly, you don’t take the time to improve your skills. You are reactive to your environment. You move someone else’s or something else’s agenda, but you’re stagnating. You are doing things that might benefit you in the short-term, but it will have a negative lasting impact on your future.

Michael Simmons’ research shows that five hours is the minimum amount of time you should spend on your self-improvement. If you don’t do this, skill inflation will catch up with you.

Five hours is not asking much. Essentially, it’s one hour per weekday on average. If you’re like the average American, you already spend 2.8 hours per day watching TV. Overall, you spend over 5 hours per day on leisure activities. What’s taking one hour off? Plus, says who that self-improvement can’t be entertaining anyway!

Quality

You want to practice deliberately in a smart way. This means you have to plan things strategically by at least answering these questions (the more specific, the better):

What do I want to learn?
Why do I want to learn it?
How am I going to learn it?
Where am I going to practice it?
When am I going to practice it?

Sounds simple? Technically, it is. In practice, however, it gets tricker. Overall, most people are not specific enough in answering the above questions. It shouldn’t take you two minutes to answer those questions. It should take you hours.

With “What do I want to learn?”, people go too broad. In workshops I host, I often hear people say they want to learn to communicate better. That’s one heck of a broad skill! Are we talking about verbal or non-verbal communication? Are we talking about written or spoken communication? What specific part of communication are you lacking in? Vocabulary? Clarity? Empathy? Tone? Something else?

In a workshop I hosted, we broke “communication” down into 77 different sub-skills in 10 minutes. Imagine if we spent hours doing it! To choose the right skill to learn, you have to break a skill down to its smallest component and pick just of few of the subskills.

When I set out to learn to be more charismatic, I broke the skill down this way:

My skill tree for the skill of “Charisma”. Built using Mind Meister.

I highlighted the ones I figured would have more impact to become more charismatic. When came time to decide what sub-skills to pick, I could easily choose from this tree.

I built the above skill tree as part of my answer to “how am I going to learn it?” I explain my full process in this article. How long do you think it took me to make the above skill tree? Easily 5 hours, including the research. To learn to be more charismatic, I found, I need to be proficient in all the above sub-skills.

Another question people don’t spend enough time on is “why do I want to learn it?” Most people don’t have a clear reason why. And without a good reason, they don’t follow through. Sounds familiar?

“It would be fun” isn’t a good reason. “Prestige” rarely is a good reason either. “Because it will make me rich” is also not a very good reason. What’s a good reason then?

One that works within your core values or simply because you have to do it. If you don’t do it, it’s an attack on your values or it has serious negative consequences, like losing your job, for example.

“Where am I going to learn it” is often overlooked. Where are you going to spend most of your practice time? At the gym? At home? Where will you get the best results?

“When am I going to learn it” is also often overlooked, but it might be the most important one. You have to schedule your learning sessions if you want to follow through. It can’t be random otherwise you’ll procrastinate doing it. Trust me, I’ve seen my fair share of people who procrastinated and could have avoided it just by doing that.

Conclusion

Skill inflation is like the concept of inflation in economics. If you don’t upgrade your situation, inflation will catch up and make you poorer. To remain relevant, you must spend at least five hours a week on your self-improvement. Not only that, but you must do it in smart ways, by answering the right questions.

In the coming years, skill inflation is only going to increase due to machines getting more skilled than humans. If you don’t skill up today, you might be out work tomorrow. Eventually, you can become irrelevant entirely. No one wants that. So get ready to learn new skills!

You can do this!

— Danny
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