The Credential Economy to the Portfolio Economy
We are in the midst of one of the largest transformations in the nature of Work. I am not referring to the decline of specific sectors or even the rise of the Gig Economy. Rather something more substantial, the transition from the credential economy to the portfolio economy.
The credential economy is the traditional system you already know. What can simply be placed on a resume, skills, work experience, education etc. Except, as many know, there has been a gap between the resume and the individual.
Lying, grade inflation, competency and “fit” are some of the many mismatches between candidate and reality. Even if one wanted to take out the more cynical arguments above, translating an abstract 4.0 GPA to a forty hour work week is dubious at best.
Many employers have tried to counter this process by interviews or tests, both of which are time consuming and expensive. In recent years employers have looked at hobbies or scoured social media to try and ascertain whether “qualified” candidates are really all they say. Linkedin was supposed to billed, as the “professional social network” yet its success is lukewarm at best.
Rather we are moving to the portfolio economy. This new economy relies on one major axiom:
Show, Don’t tell.
The Portfolio economy is perhaps more reflective of an individual’s skill, expertise, and opinion. A portfolio is a collection of one’s work, common in more artistic fields to highlight nuances, which cannot be so easily explained. This is now being applied to coders, writers, and numerous other fields beyond acting and marketing. Allowing everyone to show their actual talents versus the other selection criteria, which have been used in the past, namely the educational system.
This system is far more meritocratic than the current dying system of third party based verification. It is a first party verification system. For individuals can no longer skate by on family resources or the work they’ve done in their early years. It is rather a constantly changing metric.
This allows for autodidacts and others to participate in the economy without the barrier of credentials which restrict fields to “experts”. No longer is coding confined to computer science or economics and physics to their respective fields. More over this solves the restrictive system of degree recognition which keeps individuals in particular jurisdictions.
Exceptionalism at Work
We have seen the decline of stable work, and the rise of gig work, as Tyler Cowen stated: “Average is Over”. This statement will especially come true when job and labour markets become more liquid. As more people accept the decline of the credential economy one must be exceptional at work. Not just sometimes, but always, for your reputation depends on it.
This transition has been made possible thanks to the internet and the removal of barriers from publishing content. Artists, writers and other individuals now have the ability to showcase their work at minimal to no cost. Allowing for the presentation of actual skill and letting people decide what they want. We can see this with the rise in platforms such as Kickstarter, Patreon, and UpWork. While all have their faults, they generally allow the individual to showcase their work, skills or dream with the potential for monetization. Yet the aforementioned platforms also have another point in common, which is part of the credential economy.
More autonomy for individuals.
Autonomy that has lead the rise in behaviour which many companies hate: worker turnover. Individuals now are looking at companies the way they looked at candidates, as fungible. Scouring social media, comparing companies with others, using sites like Glassdoor for reviews and so forth. Individuals are now more informed, ask tougher questions during interviews and expect more from employers. With the rise in contract work versus full-time positions, individuals are now doing what companies have always done, mercenary-like behaviour.
Loyalty is to whom provides the most benefit. People have for decades always been treated, as cogs in the machine, now companies are the same for individuals. Cogs that can be replaced when they no longer are needed or wanted. This shift in power dynamics means companies will also have to change how they operate. Either automate and contract positions knowing turnover will occur or invest long term in individuals. Long term investment will only be for the most creative and necessary jobs.
Technology & Social Media
Social media and other contribution sites are part of the start of the portfolio economy. This is simply because they are interactive. Not only does one see what content, but also style, tone, clarity among other items. Interactive contribution sites provide another filtering mechanism, community. Beyond likes or votes, individuals garner a reputation, which can be data mined unlike “friends”. Communities know who does the work and who are the frauds.
Participation in these communities and portfolios will determine who has a real voice in conversations rather than credentials. Those as some say who have “skin in the game”. Communities will likely be the filter for signal from noise of increased availability. At least for now.
Content & Curation over Credentials.
Participatory technology is the main driver of the Gig Economy. A trend which will continue not only, as more work can be done remotely, but also because of the tools of decentralization will continue to expand. The future of money, VR integration, and 3D printing among other technologies. All of which, allow for participation without physical presence. Once realized this will allow individuals full mobility, and autonomy. In technical terms a liquid labour market or in essence, an economist’s wet dream.
The Future of Work
The transition to the portfolio economy will not be an easy one. For more companies are no longer requiring degrees for employment it is human nature to try and grasp for new metrics to offset the decline of the old system. Yet as, stated before all other metrics tests etc. are third-party verification. Companies will trust themselves more so than a new startup. Thus it is left to individuals and the discretion of companies to individually determine skill. The new metric will be an individual’s work.
Unfortunately, this also leaves a generation or two shackled with debt and credentials, which no longer have merit. These individuals are on the back-foot with regards to the new economy. Compensation will be unlikely, so it is up to the individual to understand this new economy and how to navigate it.
The success of those stuck in limbo, and anyone reading this is to leverage the power of both systems or singular the new one. One can use their good credentials already and build a portfolio or if they lack good credentials to build only a portfolio.