Getting to work: Using technology to harness a displaced workforce
Great companies will be built by figuring out how to put underutilized labor to work.
When we in the technology industry talk about the future of employment in the global economy, we tend to politicize the discussion — or worse, abstract it in a way that has little to do with the status of the people in those jobs. This failure to consider both the nature of work itself, as well as how new in-demand skills will differ from those jobs for which workers were trained, currently represents a missed opportunity for our economy and our society at large.
The tech community may be the best suited to address this challenge, not least of all because businesses built around technology have demonstrated the greatest power to displace workers. Think, for instance, about ABB’s assembly-line robotics or Amazon’s role in shifting commerce to the Internet from Main Street. Yet even more, technologists and entrepreneurs have access to the necessary expertise, resources, and tools to create real and immediate solutions that address the large number of un- and underemployed Americans.
Collectively, as builders, technology evangelists and innovators, we may appear to relish the idea of worker displacement. If we do, we’ve failed to realize that what economic theorists call “productive capacity” is a valuable asset in its own right. This failure is already producing deeply negative political consequences; Brexit and Trump are but two examples. If we don’t adopt new thinking about how employment will be reshaped in the coming decades — and, importantly, target that thinking toward meaningful innovation — many of our fellow citizens may continue to find themselves with virtually no opportunity to succeed.
There is no doubt that we already have the core ingredients we need to build the types of companies and even industries that can push society forward. In order to make that happen, we must first understand what we are talking about when we discuss the future of work. In shifting that conversation away from the abstract, we can identify substantial opportunities to keep all workers productive, which is something we must do to address real economic and social risk in a moral and just society.
We’re addressing this myopically
The tech community is simply not contemplating the future of labor in a manner that is useful to today’s workers. The portability of benefits, for example, is a vitally important but years-long policy conversation that doesn’t matter to those without employment or benefits. The tech community and job creators should be thinking more about what they can build for these individuals. Moreover, the “future of work” has become a buzzword all too often used to characterize more and more services moving to a contractor-based workforce. These so-called “1099 employees” — a misnomer to be sure — are Uber drivers, Instacart grocery pickers, Luxe valets, Mechanical Turk transcribers. Such workforces traditionally power the companies that have mastered mobile technology to make logistics simpler, easier (and usually more bespoke), but they also are workforces used by companies to distribute low value (on a revenue basis) — and often menial tasks. I don’t doubt that these job opportunities have been transformational for many people, nor do I doubt that the success of such services has also been destructive for others — for example, the impact of Craigslist on the classified ad industry and the newspapers it supported.
But this debate is in fact a bit of a sideshow. We’re already seeing businesses turn away from 1099-based models, and litigation will unfortunately continue to obfuscate the bounds of contractor vs. employee work. While there certainly can be room for additional regulation and rule-making — and I’m a strong supporter of flexibility here — these measures are still edicts on the margins of far deeper labor issues.
Plainly stated, when we use new processes to make old ones more efficient, we risk displacing labor, either inadvertently or intentionally. That’s always been the case. The automobile cost Teamsters their jobs, and the telephone cost telegraph operators their jobs. Taking a macro view (as we do far too often), we see these displacements ultimately as a success, since human capital is expensive and that (in theory) labor can be freed to do higher-order work. So we celebrate efficiency and cost savings, new forms of access and abundance.
Reality is not nearly so tidy. Workers who have spent years or decades performing a specific type of labor cannot simply pick up a new set of skills, which often require high-value training and quickly, if such training is even available to them at all. The law of unintended consequences is very much in play here, with nuance that fans of Keynesian “technical unemployment” surely miss. As economist James Bessen explains, “the jobs that get transferred to other occupations tend to be predominantly low-pay, low-skill jobs, so the burdens of automation fall most heavily on those least able and least equipped to deal with it. And often the new skills need to be learned on the job, so experience matters.” Plenty of economists, academics, and policymakers have written about, and have begun to provide better training to, the next generation of workers for needed skills. I couldn’t agree more on how critical it is to recalibrate how we educate and train. But what about today’s underutilized workers?
The opportunity
Great companies will be built by figuring out how to harness underutilized labor. If it were an easy challenge, I wouldn’t be writing this — we would be well on our way to healthy employment and significant quality of life gains. Because the opportunity is so great and the moral imperative is so compelling, it’s worth every ounce of effort we can muster to address this issue. Here are just a few areas where savvy entrepreneurs should be placing great effort:
- Building tools and platforms to teach new skills in ways that are more efficient and asynchronous. Broadly speaking, our current educational system (including vocational schools) is not set up for this. Although there seem to be thousands of distance-learning endeavors out there, the majority are geared to “modern” vocations like programming — very few seem to tackle retraining for specific marketable skills that speak to immediate needs in communities. Environmental remediation and IT support come to mind as immediate needs.
- Identifying fields where larger, lightly-trained workforces can effectively supplement those that are smaller and deeply expert. Medicine is one example, since healthcare management is often as important as the plan of treatment.
- Creating tools and resources that make the latest innovations into accessible platforms. When it comes to creative professions, for example, Adobe dominates.
- Developing accessible collaboration platforms for distributed workforces. The displaced labor pool we are addressing often lacks the ability to easily move to another region — they need to find meaningful work where they are. Platforms like Slack aren’t asynchronous enough; Salesforce is structured largely around transactions. Perch (an app we use to bridge geographical distances), brings us together but doesn’t scale.
- Building products and platforms that can provide significant value by harnessing data insights, machine learning, and artificial intelligence to help those people without deep expertise.
- Offering retirement savings and investment tools that require infrequent management or financial savvy (or can easily teach financial savvy). Workers can no longer rely on corporate or union pensions and annuities; these are relics from another era. And while contemporary tools like Betterment, Wealthfront, and Schwab Intelligent Portfolios all aim to help individuals plan and manage their own retirement savings, they are still too opaque (check out all the confusion over Betterment and Wealthfront fees!) and therefore can seem intimidating and inaccessible. As for retail banks, they may have the best direct access to their customers, but they aren’t known for innovation or speed — and they have a trust problem.
- Developing tools that aid access to and deployment of government benefits and services. We must use technology to help government deploy services efficiently and quickly, to provide things like faster enrollment in food assistance or accurate provisioning of disability benefits, as well as new ways to keep health systems accountable to Medicare patients while eliminating errors and fraud. Code for America’s GetCalFresh, an app that helps simplify SNAP signups in a handful of California counties, is an early look at what this could look like.
- Building platforms that make labor markets more frictionless, such as simplifying processes by which people find relevant jobs, get screened for them and get hired. More broadly, we also need better platforms to enable workers to move across sectors and skill sets.
- Lowering the barrier to business formation. The backbone of the U.S. economy has always been small businesses and the entrepreneurs who create them. But navigating this regulatory landscape is more difficult than ever: Whether applying for a SBA loan, a license, or trying to comply with esoteric accounting rules, government has made building and running a business far too complex and unsustainable. Tools that help people successfully start and operate small and medium-sized businesses by streamlining formation and operations will be revolutionary.
The best part about all of these challenges is that there’s no new science required — the underlying technology to effect these tools, systems, and platforms is all here. Sure, new science will help us iterate in order to get more effective and more useful. But we can start right now. And these are just a few ideas — there are countless others if we make a strong commitment to engage with local communities and institutions outside of technology. We cannot identify high-order needs and solutions if we invent things in a cloistered environment.
As a society, what stands in our way? Improperly allocated capital and a shortage of technical talent. As many others have discussed, institutional venture capital is still the only game in town for new tech businesses to capitalize. And institutional VC is a followers’ game — these new businesses won’t pattern-match until a few of them are wildly successful. And at that point, the VC flock will happily fund. But until then, Sand Hill Road interest will remain inconsistent and halfhearted at best. This reality is ironic: We have excess labor capacity — and yet there is also a consistent dearth of technical talent, one the U.S. filled for centuries by attracting the best and brightest to move here. But as we’ve radically closed our gates over the last few decades, we have found ourselves short — and now we don’t have the talent we need to remedy the problem. Nevertheless, I believe there is just enough capital and just enough talent to make inroads. Having a few new services emerge that take advantage of this idle labor will bring clarity and purpose and the capital and talent will follow, as it always has.
The present risk
We don’t have the luxury of treating this situation as an academic exercise or an experiment. We must productively make use of underskilled (or wrongly-skilled) labor because their productivity is being undermined by fear and anger. These are emotions that never lead to good decisionmaking and politics. Which means this isn’t just an exercise simply in creating more innovative value, but also a very real imperative to suggest that if we don’t, ultimately all of us will pay in one way or another.
Specifically, American and European workers alike are feeling the pressure of the IT-driven economy — leading to a well-founded fear of losing jobs and opportunity. This fear manifests itself in anti-immigration sentiment, nativist movements, and anti-trade reactionism. It is dominating a presidential election and it prompted the British departure from the European Union. It risks turning the regulatory tide further toward overprotective, deeply restrictive lawmaking we associate with European states. In short, this pervasive nature of this fear puts us at risk of crushing the American aspirations of scientific discovery and entrepreneurialism.
The tech elite criticized British voters for voting in their own short-term self interest, and assailed the politicians who fanned that sentiment for the sake of their majorities (and lost big). As for the U.S., we as citizens still believe in American exceptionalism. We’re more right than not — this country is something special. But we are all living in an increasingly connected world. If we believe we are so different from the British, we do it at our great peril.
A cost we all bear
Beyond political consequences, all we have managed to do so far in our quest for greater efficiency is shift labor costs from one employer to society as a whole, where costs are spread across all productive workers in the form of collected taxes and distributed benefits. That’s not wrong — as a moral society, we’ve determined that we should not abandon people without even a modicum of resources, or throw them to the mercy of charity (where it exists). Yet government is deeply inefficient, and government benefits are immensely disempowering, making the cost far greater than productive employment could provide. This is the extreme case — we know that over the last several years a non-trivial number of workers simply opted out or were forced to leave the productive workforce (a figure of some debate, but much universal concern). We can’t expect that government is going to fix this for us.
We can, should, and need to get more creative about harnessing the full potential of the workforce with our knowledge, expertise, and resources — always remembering that we do not live in a bubble — we can’t hide in Silicon Valley. Even as the tech community continues to build great wealth, we must redouble our efforts to tackle some of the deepest challenges — and inequalities — we face in society. Together, let’s do what we in Silicon Valley claim we do: build a better world, and a stronger world — for all of us.
Special thanks to those who provided early thoughts and edits, particularly Karen Wickre, Julie Samuels, and Laura Sillman.
