Building Blocks for an Uncertain Future of Work

Governments should temper their obsession with skills, and build a comprehensive and systemic employment strategy.

Last year I attended a roundtable discussion held by the Federal Government. Around the table were 25 very well researched and knowledgeable people about the future of work and training. Over the course of a two-hour discussion, they made about 20 different recommendations about what the government should do in relation to skills. Teach more STEM! Teach coding in kindergarten! Less STEM and more soft skills! Design thinking! No, not that type of design thinking, this type of design thinking! Why would you teach coding when coding will soon be automated?!

There was no possibility that the beleaguered bureaucrats in attendance could have left with any recommendation other than ¯\_(ツ)_/¯.

This scene encapsulates what’s wrong with the current approach to employment policy. It’s an incremental, evidence-based approach that starts with the question: what skills will employers need in the future? What jobs will be in demand? If we could only answer those questions, we could re-design our education and training system to meet those needs, and therefore prepare people for successful careers. Because policy makers are asking these questions, think tanks and consulting companies all over the world are taking different approaches to answering them, leading to a series of reports outlining what skills will we need in 2030, 2050, or some other arbitrary date in the future.

The problem is that we’re terrible at making these kinds of predictions. The economy is dynamic and complex and depends on things that are impossible to forecast. How do the predictions change if there’s a civil war in China? Or if we start taxing robots? Or if NAFTA collapses? There is a ton of uncertainty built in, causing vast differences in results, both about what skills will be needed and how many jobs will be lost or gained in the future.¹ As with the roundtable, this leaves policy makers with no clear path to follow.

The issue here is that predicting a specific future is a fool’s errand, and as a result the wrong questions are being asked. Instead of asking what jobs will be in demand, or what skills will be required, we should focus on more open-ended questions that can provide a more general direction. What environment will workers be facing? How will their work-lives be different? How does that affect the support they will require?

On these questions, “Future of Work” reports are very consistent: the future will include fewer full-time jobs, more frequent job changes, and will require workers to acquire more new skills throughout their work-lives.

All of this can be summarized into one key idea: workers’ lives will become more and more uncertain, and therefore harder and harder to manage. If, instead of focusing on specific skills and jobs, policymakers were singularly focused on building systems that helped manage and mitigate uncertainty, how would their approach be different?

Eighteen months ago I wrote that policy makers were paralyzed by the “Future of Work,” and that they should ditch the pilot projects and pursue real systemic change. That got me invited to a lot of roundtables, symposiums and conferences. My observation is that, despite lots of discussion, we’re just as stuck today.

The purpose of this article is to go beyond skills, and to outline some systemic changes and other investments that would allow us to tackle the challenge of uncertainty head on. Executing in these areas will build more resiliency into the system, providing tools to help people manage uncertainty in their work-lives and reduce complexity in their non-work lives.

Item 1: Create a flexible social support system that treats all forms of work equally

The purpose of the social safety net is to support people in times of need and transition and to help smooth out income over people’s lives. In effect, to manage and mitigate uncertainty. For the most part, Canada’s system works pretty well. If you’re a full-time worker, that is.

Here’s an abbreviated list of things, some provided by government, and some regulated by government, that are designed for people in full-time employment: retirement planning (CPP and RRSP), employment insurance (EI), collective bargaining, workers’ compensation, paying taxes, getting a loan, renting an apartment (“Where’s your letter from your employer? Oh…um…sorry…the place is already rented.”) and child care². Each of these is either more expensive, harder or inaccessible if you don’t have a full-time job.

Add it all up and you have a system that completely fails self-employed and other non-traditional workers. At SCP, we call this the “support gap.”³ As our labour market becomes less full-time, this problem will get worse.

The most fundamental building block of an employment system designed for uncertainty is a flexible support system. Ours is decidedly inflexible. Fixing all these issues is a massive undertaking, to be sure, but to prepare for the future of work, this is a critical place to start. A lot of good thinking on how to approach this has already been done, though it has generally focused on things the government directly controls, such as EI and program spending.⁴ Policy makers need to extend beyond that and bring other stakeholders to the table. How do we fix the banking system’s bias against non-traditional workers? How do we prevent landlords from turning down self-employed people? How do we enable unions for freelancers? Creating a productive environment for the workers of the future will require an all-of-society effort.

This issue is also a philosophical one. Imagine three people, one who works 40 hours for one employer, one who’s paid for a total of 40 hours a week by two employers, and one who’s self-employed and works 40 hours for multiple clients. They are participating equally in our economy, yet the life of the full-time employee will be much easier than the part-timer and the self-employed person will face more challenges still. Why is that OK? We talk a lot today about wanting people to be entrepreneurial, resilient and creative in finding the right opportunities for themselves. But we continue to provide huge advantages for people choosing the traditional, full-time path.

If we’re serious about helping more people thrive amidst the uncertainties of the future of work, we need to become a society where workers are workers, with all the same basic rights, access and benefits, regardless of how they work or who pays them.

Item 2: Fund WorkerTech

Embracing the uncertainty of the future of work means being open to important solutions coming from anywhere. Some issues will be solved through careful crafting of public policy, and some will be solved by entrepreneurs creating products that fill gaps.

To date, the government’s support for innovation has been very “founder” focused: how do we support underrepresented entrepreneurs? While this is great, they should also be “client” focused — which underrepresented Canadians are not being served by the innovation economy today? Why? How could a different approach to funding or other kinds of support help change this?

Nicolas Colin, a French public servant turned venture capitalist, recently profiled “10 Startups Coming To Save the Social Safety Net” and I discussed 12 initiatives that would solve problems in Canada based on our partnership with the RSA on the Future Work Awards. Among the many that we like are WeMind which helps freelancers rent apartments and get insurance, Credly, which helps document people’s non-traditional training and Hogaru which transforms freelance domestic cleaners into full-time workers. There are amazing ideas being developed.

We call this nascent sector “WorkerTech” and it could be a huge opportunity for Canada. Funding is scarce, and a relatively small worker-focused investment fund and the active support of governments⁵ would go a long way in this space. The people behind these companies are often committed, mission-oriented leaders and if we can find creative ways to fund them, their initiatives could help thousands of Canadians.

This is by far the easiest idea here to make happen. A focused WorkerTech incubator could follow the model of the Financial Solutions Lab, which has produced start-ups that are helping thousands of low-income Americans. Funding could come from the Future Skills Centre. And while the Canadian tech community has made some progressive proclamations, little action has followed. This would be a great opportunity for them to rally around and show how the “innovation economy” can be directed toward social good.

Item 3: Develop an ambitious technology strategy for the labour market

There’s no question that technology will play an even bigger role in the future labour market, as over 85% of job searches already begin online. This could be great, as for every headline that reads “The Robots Are Coming For Your Job” could also read “The Robots Are Here To Help You Get A Job.” Artificial Intelligence⁶ is as well suited to finding the perfect fit between employer and employee as it is to almost anything else. In an era of more and more uncertainty, leveraging technology to automatically help people make better and easier employment and training choices would make huge difference.

Unfortunately, we’re nowhere close to that today.

The employment and training ecosystem is a fragmented and disconnected mess. For a jobseeker trying to find a realistic career path, navigating the off-line and online options for coaching, training and other forms of assistance is incredibly difficult. It’s not much better for employers who must wade through a flood of resumés that arrive via online search engines and platforms. Like everything else, the system favours people who already have experience and are currently in full-time jobs, and as we enter a more uncertain age with fewer of these jobs, the complexity of the system will become an even bigger problem.

I know what you’re about to say: “government should stay away from technology because they’re bad at it. Remember the Pheonix payroll system?”

I do, and I have three things to say about that.

First, do you know who else is bad at implementing IT projects? Everyone! Some estimates suggest less than 30% of IT implementation projects are successful, and those numbers are even worse for large projects. Yes, Pheonix was (and remains) a mess, but the government is not alone here and, you know, enough already.

Second, the internet is literally the infrastructure of the modern economy, as important as roads, sewers and power plants. The government simply can’t abdicate responsibility for managing, regulating and investing in infrastructure. And if the last few years have taught us anything, it’s that we can’t trust private technology companies to manage this for us, or to “regulate” themselves. The US abdicated responsibility for regulating technology and enabled a foreign power to shift a Presidential election. Do we really want our employment and training system to be run by Facebook for Jobs?

Third, the government doesn’t need to actually build all (or maybe any) of the technology themselves. But they need to know what type of system we want, they need to invest in it, and they need to help set the rules and guardrails for it. Think about it like a road system, where the government rarely puts a shovel in the ground, but where capital investment, a set of rules, and a clear approach to enforcement makes life safer and easier for people, and allows the economy to operate more productively.

If you still think governments should just “leave this to the market,” and are an intellectually curious person, I’d recommend reading Mariana Mazzucato’s Entrepreneurial State. In it, she shows how government action and investment has been essential to almost all the innovations we attribute to entrepreneurs and the private sector, from the iPhone to the latest miracle drug. She has also advocated a “mission-oriented” approach⁷ to government investment in innovation, based on the Apollo program, that involves all sectors in pursuing an ambitious project.⁸ The EU has recently adopted her approach for five massive goals they’ve outlined, and there’s no reason why Canada couldn’t take a mission-oriented approach to our employment and training infrastructure.

In fact, other countries are already taking steps toward a more ambitious approach.⁹ Sweden is actively building an open infrastructure for their labour market. The US Chamber of Commerce is leading a large partnership to develop standards that would underpin an interconnected ecosystem. Finland is building an AI robot that will, among other things, tell people when the demand for their current skills are declining. We took this a step further in our report this January, where we called for international cooperation to build a work and training ecosystem that would far exceed what we have access to today.

With our significant AI capacity, world-leading universities and commitment to investing in innovation and infrastructure¹⁰, there’s no reason Canada’s policymakers can’t plot the world’s most ambitious technology agenda for our labour market. But whatever path they choose, they need to choose it fast, because our current system simply doesn’t have the tools to deal with the uncertainty on the horizon.

Item 4: Build a Comprehensive Strategy

Policy makers talk a lot about “lifelong learning” and for good reason. Graduation from high school or post-secondary no longer marks the end of learning; it’s simply a transition from one form of learning to another. To survive and thrive in an ever-changing work environment, people are going to have to proactively seek out opportunities to learn new skills throughout their career.

It’s the one agenda item where there’s been real movement over the last few years. Both the Federal government’s significant investment in the Future Skills Centre and the Canada Training Benefit (CTB) announced in this year’s budget are targeting lifelong learning. This is good! The problem becomes clear, though, when you start to dig in to how these programs actually work. I’ll use them to illustrate how little progress can be made without addressing the broken systems identified in items 1 and 3 above.

The CTB provides for some funding, and partially paid time off for anyone who wants to pursue training while employed. However, the paid time off is linked to Employment Insurance (EI), a core component of our safety net, but one which is primarily designed for traditional employees. Self-employed people need to “opt-in” to pay into, and receive, EI benefits. But, as pithily put by Noah Zon and Adrienne Lipsey, “opting-in to EI benefits is a bad deal and is complicated to access.”¹¹ So, a tool that would be incredibly helpful for self-employed people needing to enhance their skills is severely limited by the inflexibility of our safety net.

Further, the shortcomings of Canada’s employment and training ecosystem will also limit the effectiveness of both these investments. The Future Skills Centre’s purpose is to identify and evaluate innovative approaches to help Canadians gain the skills they need as work changes. A lot of this will be done by funding pilot projects for promising ideas. But once a particular idea is proven, what happens next? Our disconnected and inefficient ecosystem will make it very hard for these ideas to reach their target audiences, and a lot of this work will likely be wasted. This is also a problem for the CTB, as without a strong system that links training directly to employment, much of the lifelong learning supported by the program won’t lead to better outcomes for people.

The government’s focus on lifelong learning is a critical part of a comprehensive strategy designed for labour market uncertainty. But, as a stand-alone investment, its impact will be severely limited.

I’ve tried to describe the systems-level thinking we need to engage in as work continues to change. We need to build highways, not fix potholes. Critically, nothing discussed here relies on our ability to predict the future. Each suggestion helps build a more resilient workforce, better able to deal with uncertainty, regardless of which scenario of the future plays out.

I wish I could say I was optimistic that our policy makers are looking for answers like these. But it’s quite clear from the recent Federal election that these issues are not on the radar of any of Canada’s major political parties. And based on my experience, the government’s advisors in our bureaucracy are also struggling to embrace the systemic change that’s needed.

While the policy makers I’ve talked to are intelligent, thoughtful and engaged, when it comes to discussing some of these ideas, there have been excuses aplenty. When we talk about what other countries are doing, I hear a lot of “well, Estonia and Singapore are so small” and “Finland doesn’t have the Federal/Provincial issue.” When we discuss some of the key trends in how work is changing, I hear about how these trends haven’t “showed up” in the numbers yet.

In fact, this article was partially motivated by a very senior bureaucrat saying “I hear you, but the stats show that full-time work hasn’t declined in 20 years, so why is this something I should worry about?” And, amazingly, in the very next sentence he talked about how bad our data is, and how it’s really important for us to get better information before we decide what to do.

These responses betray a worrying lack of urgency and ambition. Every country has its own challenges, and there’s nothing about Canada that should make great progress impossible. And as for the “numbers,” it seems like a real Canadian trait to blame a lack of action on bad or insufficient data. This is just fear of failure dressed up as statistics. Enough people have written enough studies to know that work is changing.

We should already be well motivated to act with urgency. At least a third of our workforce is currently in non-traditional employment and face day-to-day challenges of uncertainty. And we’ve spent much of the last few decades attempting, and largely failing, to help workers transition out of declining industries. That’s why I hate the term “Future of Work” — it makes it seem like these issues aren’t already very real for a lot people. They most definitely are. The ideas contained here would provide them tools and support to help them succeed today.

These ideas are also easy to sell. Investing in WorkerTech and executing on an ambitious technology strategy is “investing in innovation to build Canada’s infrastructure of the future.” A flexible safety net and better lifelong learning opportunities is “making Canada the best place in the world to work.” Not only are these optimistic and ambitious statements that would sound great in any election campaign, they have the added advantage of being true.

So, enough with the roundtables, symposiums, conferences and reports. We know what we need to know and systemic change takes time. For Canada’s workforce to be resilient enough to succeed as work continues to change, policy makers need to turn intention into action and build a comprehensive and ambitious employment strategy. And they need to start now.

Thanks so much to Taylor Sekhon, Jack Graham and Lisa Hrabluk for their help during the tortured (all my fault) production of this article.

Social Capital Partners is an independently funded non-profit that designs and implements systemic ideas to tackle social problems. Our main focus areas are employment and wealth inequality. For more please visit socialcapitalpartners.ca, follow us on Twitter @SocialCP and visit our Medium Page.

[1] For an entertaining stroll through the predictions on jobs lost/gained, see MIT’s chart that tracks them.

[2] In some urban centres in order to get a place in child care you need to sign up for all five days of the week, no matter what your needs are. If you manage to get a part-time spot, you need to decide which days in advance.

[3] For more details on the “support gap” see our article in Brookfield’s Innovative and Inclusive Economy series.

[4] In Canada some great work has been done by the sadly defunct Mowat Centre: 1, 2 and 3. The Public Policy Forum is producing good work, including on portable benefits. In the US the Aspen Institute’s Future of Work Initiative is worth reviewing. This is a good summary of some of the issues from the Harvard Business Review. There are many others.

[5] Active support can mean creative approaches like the data partnership between the Government of France and French non-profit Bayes Impact. Bayes used access to government employment data to create the AI-powered Bob Emploi, an app that helps people navigate the job market.

[6] Or Big Data, or Machine Learning — choose your two letter acronym

[7] It’s worth checking out the chart on page 21, which compares the traditional “market fixing” approach to policy with her suggested “market shaping” approach.

[8] A great recent profile on her work is here: https://www.wired.co.uk/article/mariana-mazzucato

[9] To review this in depth, a good starting point is UK-based Nesta’s Digital Frontrunners project, which is following the progress of some of the leading countries building technology infrastructure: the Netherlands, Sweden, Belgium, Finland, Denmark and Estonia.

[10] There’s always a lot of public support for building infrastructure, as it leads to good jobs, only needs to be built once (i.e. doesn’t lead to recurring annual spending), and leaves a useful thing behind. This is as true for digital infrastructure as it is for a road or a bridge. It’s just makes for a more awkward photo op.

[11] This quote comes from an article written in Policy Options about how our inflexible support system affects parental leave.