Sally Helgesen

This doesn't mean that I've never lost out on engagements before. One memorable December, it happened twice: one group instead decided to bring in an ethicist to deliver their keynote, while another replaced me with a clown. And although it amused me to think that I was competing with Clarabelle and a budding Kierkegaard, this double loss provided little insight into what people were interested in hearing. But last spring's events had been canceled outright, and the coincidence seemed indicative of some larger design; each gathering shared the theme "Winning the War for Talent," a wildly popular topic in the conference world for the last few years.

I asked a friend—a senior human resources executive for a financial services company—what she thought. "It's simple," she said. "With the dot-com fallout, and so many smart people suddenly on the streets looking for work, a lot of companies believe the war for talent is over."

Knowledge—not land, not capital, not machines—now determines the core value of every kind of enterprise, as the capacity to innovate becomes the primary determinant of success.

Since then, I've heard countless variations of this notion. In many quarters, a consensus is emerging that when it comes to talent, we're reverting to a buyer's market, in which organizations will once again hold the balance of bargaining power. According to this scenario, the recent downturn in the economy and weakness in financial markets has made clear that "new paradigms" of an empowered workforce were only the consequence of the flush 1990s. Thus, the specter of loosening labor markets is presumed to be sending us back to the days when companies dictated the terms of employment, and people had to adjust to meet their demands.

Don't bet on it.

Despite the media coverage of humbled dot-comers getting fitted for their first suits, fundamental changes have occurred in the relationship between people and work over the last decade. These changes ensure that fierce competition for the talents of smart and innovative individuals will continue to be the major priority of every organization that hopes to flourish in the global marketplace. Imagining this to be untrue is the result of a popular fallacy that, since business has revealed itself to be still subject to the usual cycles, the "new economy" was a mirage.

Yet the changes wrought over the last decade by major shifts in the nature of technology, the economy and demographics are profound and fundamental. And while the pace of these changes is surely decelerating because of the cyclical slowdown (which is only exacerbated by the events of September 11), the direction of these changes cannot be reversed. For what has happened over the last decade was more than a mere boom; it is nothing less than an alteration in how we appraise the worth of human knowledge.

Knowledge—not land, not capital, not powerful machines—now determines the core value of every kind of enterprise, as the capacity to innovate becomes the primary determinant of long-term success. So, in a neat reversal of Marxian economics, it is the workers who own the primary means of production, which is lodged in their brains and gets into the elevator with them when they go home.

People in organizations have been empowered not only by the strong economy of the last decade (although this has helped), but by an essential change in how their talent is valued. And they have been further empowered by changes in the structures of organizations, which have defused decision-making in order to operate more leanly, and become more web-like to reflect the shape of today's technologies. As a result of these fundamental changes, the balance of power has begun to shift from organizations to individuals.

The extraordinary entrepreneurism of recent years (which has put further pressure on organizations when it comes to retaining talent) is also an expression of this power shift, as well as an expression of the diminishing dependence of people upon organizations. And while today's slowing economy certainly impacts the start of new ventures by making capital harder to raise, the value of a good idea—and its potential to provide an individual with alternatives to life in an established organization—remains.

Given these conditions, the "war for talent" is hardly over. Indeed, given that we stand on the frontier of the knowledge era, it has merely begun. While researching my latest book, I became aware of just how strong the sense of empowerment is today, especially among the younger generation of workers. Over and over, managers told stories of employees under 40, who could quantify their value, articulate their needs and share a clear vision of what they wanted to achieve. They viewed the organizations they worked for as partners that could provide the means for them to develop their skills and their relationships. As one senior vice president of sales said, "Ten years ago, young MBAs would ask, 'What do you see for me?' Today, they say, 'This is where I see myself going.' And they have a plan for how to get there."

A sense of independence and a sturdy self-confidence lies at the root of this shift, one that our culture has done much to cultivate. In recent decades, ours has become the great "have it your way" society, with organizations vying to fill ever-smaller niches and meet ever-more highly individualized needs. The message to customers and consumers has been unrelenting: customize it, adapt it, make it work for you. Is it any wonder, then, that people have begun to expect that their work should meet and reflect their needs; that their talents should be nurtured, recognized and developed—and if this fails to happen, they should move on? This is how our society has developed. The trend may be slowing, but it is not about to be reversed.