September 18, 2018

Investing in one self - Economics 101


'Too much work and no time to learn'; 'Too exhausted to learn' - are some complaints from working professionals and 'Too much to learn and not sure what to do with it' are complaints from students. Time is a scarce commodity and all of us have only 24 hours in a day. How we deploy these 24 hours is the single most factor that will determine success in whichever way you define/ aspire for.

The connection to Economics 101 came up in a random discussion with my teenage daughter. There is a concept called 'Production Possibility Frontier (PPF)' that is taught in Economics. It talks about a fundamental choice to be made in deploying scarce manpower. This can be used to produce necessities or defense equipment, or other such options. PPF gives a framework to deploy a scarce resource (the fundamental problem) based on the opportunity cost, production efficiency, consumption efficiency and economies of scale.

While the application of this concept has been primarily for a society or an organization, it can be applied at an individual level too. On any day or over time, I can choose to spend the time 'working/ fulfilling duties/ using the skills' or invest in 'developing new/ honing existing skills'. You can add 'leisure/ enjoyment' also as a third choice. For simplicity, let us look at the PPF graph for the first two choices only:



There are three different aspects of this worth looking into:
  1. 'Investment' does not give us immediate results and takes time away from immediate tasks. Hence, one is tempted to completely focus on current work and ignore the investment activities. However, we need to note that these frontiers are not static. By improving efficiency and learning new skills, this PPF can shift right significantly. In the worst case, if the skills are no longer useful, it may even shift left.
  2. The opportunity cost (what you lose on one dimension by moving resources to the other choice) varies based on where you are operating on the curve. So, moving 30-60 minutes of your time to investment may not impact your work much. But, if you are already spending 1 hour and you want to spend another 1 hour, it may impact the work output. The same holds when you move from the other side.
  3. PPF also tells us that if you are not operating on the frontier, you are not working at your complete potential. All of us can vouch that in this case, time can be wasted in many different ways :-)


Applying these insights, we can see:
  1. Right Efficiency: We need to track where we are spending our time to first ensure that we are on the frontier of efficiency and not wasting time that prevents us from achieving the potential.
  2. Right Mix: Once we are at max efficiency, achieving an ideal mix based on the stage of life is essential - as a student or working professional. Focus on applying what you learn and learning while you work.
  3. Right Shift: The frontier can be moved significantly only by investing time in one self - whether it is new skills (soft skills to domain knowledge). If not, there will just be incremental changes. This is best done by self-discipline or it can be mandated by leaders of teams.

In my experience, meditation is one such daily investment that yields great benefits. Half an hour per day invested into meditation can significantly right-shift the curve allowing you to deliver much more than you could have done without it. Regular practice makes the right shifted curve a new normal. You can learn more about the simplest and most effective one that I follow at www.artofliving.org.

Think about how you can apply this in your life or help team members/ friends get out of the trap of growth-less-'busy'-ness. Do share your experience below.
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