The Future of Work — According to the Experts
Disclosure: I received a complimentary ticket to The Economist’s FutureWorks summit. All errors and opinions in this post are very much my own.
Two days before the fateful EU referendum I attended the The Economist’s FutureWorks summit in London, a one-day event bringing together leading academics, policy-makers and corporate executives to discuss the future of work in Europe.
The projects I have been involved in over the last few years have effectively culminated in a single question — how can we create a future of work that actually works for all of us? — the answer to which will be the subject of the book I have just started to write. FutureWorks was a unique opportunity for anyone interested in gaining an insight into what those on the frontline of business and policy think that the future holds.
We heard from Tom Standage and Andrew Palmer fromThe Economist, who chaired the various panels. We also heard from an impressive lineup of speakers, including from international organisations (OECD, ILO), big tech firms (IBM, Cisco), tech startups (Transferwise), academia and consulting. A full list of speakers is available here.
At the core of the discussion were the issues of technological advance, labour productivity and shifting demographics. We learned that productivity growth continues to be sluggish in the UK and across Europe, and that the solution lies in boosting public and private investment as well as creating a more motivated workforce. There will also have to be more investment in the human capital of our workers to plug the growing skills gap. We heard that there is a need for more on-the-job training but that workers may also find that they themselves are increasingly responsible for their own lifelong learning and career management. We also learned that automation and Artificial Intelligence will, as is decried in the media, replace some jobs — although how many is still up for debate. However, far from fearing this development, the speakers’ overall view was that we should embrace the possibility that the remarkable diffusion of technology we are currently experiencing will also create opportunities for more fulfilling work.
Fast forward to two days later, and, in the subsequent media post-mortems, many have said that the EU referendum result was precipitated by concerns about jobs and economic participation in our society. The panellists at the FutureWorks summit were in effect discussing exactly that, and their conclusions and suggestions have never been more relevant.
One of the “meta-themes” of the FutureWorks conference was that technology, demographic pressures and changing attitudes to employment are all giving rise to more flexible, fluid working practices. However, some panellists made the point that the benefits of this fluidity will not be shared evenly — that is, unless we collectively do something to ensure a fairer distribution. We already have some ideas of what that “something” might be: education, skills training, a flex-security style social safety net. I think that it will take much experimentation to hit upon the right combination of policies, but what is critical is to start by asking the important questions: what kind of distribution do we want? What is fair? We are going to have to face up to these questions in the coming months and years as we try to get a handle on life post-EU.
The other overriding message was that we are no longer (if we ever really were) in a world where the economy churns out widgets, profits flow to the most efficient producers, and workers clock into the same job throughout their career, receiving as compensation their share of the fruits of their labour. Creativity and human expression are not side-projects to production anymore but rather the drivers of innovation and the keys to unlocking unknowable stores of wealth and prosperity. The panellists underscored the notion that companies must clearly define their broader purpose — beyond just making lots of money — if they are to engage customers and employees. The ubiquity of computing power and robotics, and the outsourcing of many aspects of production, mean that efficiency and the competitive edge come not only from production processes but also from inspired human beings leveraging the appropriate technology to serve uniquely human ends.
For anyone interested in the panellists’ vision for the future of work, I have pulled out some of the most interesting points below. You can expect a discussion of: looking for the future in the present; the need to avoid generalisations when talking about the future of work; the impact of changing workplace practices; trends in productivity; the possibility that the inequality may increase in the future; the impact of automation and Artificial Intelligence; the skills we will need in the future; and the need to support a purposeful business culture. Enjoy!
The Future is Already Here
Tom Standage, Deputy Editor of The Economist, opened the conference by reminding us that the seeds of the future can be found in the present. He quoted the science-fiction writer William Gibson: “The future is already here — it’s just not very evenly distributed”.
Standage recalled that, in 2001, if you wanted to know what kind of technology the rest of us would be using over the next decade you just had to visit Japan. In particular you would go to the Harajuku hangouts of young Japanese schoolgirls, who always seemed to be lightyears ahead in terms of social culture and gadgets.
I remember visiting Japan in 2004 and, with jaw agape, watching Japanese youngsters capture 3D, holographic photos on their mobile phones (this was back when, for us technological laggards, the most impressive feature of our devices was that they were “mobile”, and long before we started thinking of them as “smart”). It may be that the Japanese schoolgirl is no longer the barometer for technological cool, but the point remains that someone, somewhere is already using the technology of our future. 3D printing, nanotechnology, Deep Learning, drones, virtual and augmented reality, or digital collaboration tools — we can already see these technologies being deployed at the fringes of the productive economy.
I think that the message is that the future is not something that just happens to us, we are not passive in its progress. We are actively participating in the incubation and development of our own future. The forces drawing us into that still-distant world may be irresistible but they are not deterministic. We can, and will, shape the future, but it is up to us how wittingly, how graciously, and to what ends we choose to do so.
Semantics matter
Some of the speakers emphasised that when discussing the future of work it is extremely important that we take care to say what we mean, precisely and without generalisations. Generalisations lead to obfuscation which can lead to dodgy policy.
For example, when we talk about “technology” impacting the future of work, what technology are we talking about, exactly? “Technology” is not just one thing. Tom Standage highlighted a few different categories of technology to watch out for — communications, organisational technology and the division of labour, mechanisation, infrastructure, new materials and processes. The distinctions matter when we talk about training people in “technology” or fostering innovation of “technology” or even whether “technology” will replace our jobs. Each type of technology will have a different impact on how we operate in the future.
Standage also warned against using the term “millennials” to refer to those who have recently entered the workforce or will be doing so over the next few years. We cannot talk sensibly about the things that “millennials” want because they do not form a defined group, and many of the things “they” supposedly want — such as respect in the workplace and to do work that matters — are, in reality, things that most people want. Those attributes that many associate with so-called “millennials” may in fact be more of an emerging mindset in the workforce than a demographic group.
John Howkins, author of The Creative Economy, highlighted that one of the problems with talking about the future of work is that it tends very quickly to mutate into a discussion about jobs, employment and the economy. These are all important but, for clarity, they are best discussed separately. For example, we conduct more and more of our work outside of the office and use the same device for work and social purposes. We spend time on social media contributing content for free, but equally anyone can set up a revenue-generating blog, publishing their thoughts or diary entries for the general public to consume — all they need is access to a computer and the internet. As the lines blur between paid work and unpaid work, the distinction between work and jobs becomes more fluid. It may be impossible to keep them totally separate, but a policy to increase work is very different from one to increase jobs (indeed I think most people would prefer more jobs and less work) so again we need to be clear which one we are talking about.
Just as we need to distinguish between “work” and “jobs”, we also need to separate the discussion on “job security” from that of “employment security”. As Jonas Prising, Chairman and CEO of Manpower Group, indicated, as we move into more fluid and flexible modes of working we can imagine an economy where employment is guaranteed but the specific job is not. If job security is a thing of the past, can we support employment security instead? This may mean, for example, providing resources for people to retrain when in between jobs. Many countries are already doing this to some extent but not, I think, on a big enough scale to change cultural thinking, for example the expectation that education and work must follow each other in sequence rather than being pursued in parallel.
More Power to the Worker…and More Risks too
With greater flexibility, remote working possibilities, and enormous computing power at their disposal, are workers any better off?
Diane Gherson, Chief Human Resources Officer for IBM, commented that those entering the workforce today have more market power and can demand more from their employers as the competition for talent goes global. I fear, however, that this may be the case for an elite few superstars and not for the masses of workers who, we heard from other speakers, face an employment market in which their qualifications have become devalued and they are expected to work harder for less compensation.
We can also see see a tension in the discussion of who gains more from flexibility — the worker or the employer. Whenever I talk to Uber drivers they always say that the flexibility is what attracts them to the Uber platform — they can choose their own hours and work without a boss breathing down their neck. But Uber has openly said that it is looking to get rid of drivers altogether and replace them with autonomous vehicles. This is surely the direction of travel in many industries, as previously complex jobs are broken down into distributable tasks, outsourced and then automated.
The general trend in flexibility is that the risks that used to be borne by the company are pushed onto the worker. Whilst technology-mediated work may have democratised the marketplace for “gigs” we must also accept that not everyone can or will want to be a freelancer jumping from one job to another. To support this infrastructure, and ensure that no one gets left behind, we will need to reform our tax and benefits system, and how we invest in skills and education. This is not a discussion for labour economists, HR professionals and technologists alone.
Several participants repeated the idea that workers today are looking to work for companies that have a sense of purpose. When carrying out customer development for my careers startup I found that students graduating in the next couple of years did want purpose — but would settle in the short-term for a job that paid off their ballooning student debt. There is a conflict there between hopes and reality, but if good intentions win, and we can create more jobs with purpose, en-masse, then fewer people will have to face this trade-off.
The Productivity Puzzle
Sandra Polaski, Former Deputy Director General for Policy at the International Labour Organisation, talked us through the productivity numbers for the UK and Europe — and they did not look good. Despite the visible proliferation of various technologies in our working and social lives, we have not seen an associated spike in productivity. Productivity growth has in fact slowed, and, interestingly, this is primarily due to a deficit in capital investment. What productivity growth we have seen can be attributed to labour input. This means that we are working harder, longer hours with less capital.
Polaski’s prescription to boost output growth was to increase investment, but also to try to increase Multi Factor Productivity, which reflects the efficiency with which we can meld man (and woman) with machine. This comes down to “organisation” — how management practices influence the combination of the factors of production — and “motivation” — how the workers respond. On motivation, Polaski highlighted empirical research that showed that minimum wages or wage increases actually drive productivity as employers seek to get more out of their workers. Instead of substituting capital for labour, employers may invest in human capital. This means we do not have to wait for productivity to increase in order to finance increased wages since the wage level itself has a stimulating effect on motivation and Multi Factor Productivity.
Polaski underlined that rising levels of productivity are essential for rising standards of living, but that the question of how the gains are to be distributed is a separate issue — we need productivity to rise either way. I’m not convinced that it is an entirely separate issue because if the system we choose to generate output growth does so predicated on the incentives of an unequal society then the system will necessarily benefit some more than others (or, in our case, a few more than most). This, I believe, is the situation in most entrepreneurial, capitalist systems. The profit motive and the American-style Dream of making your millions does not survive massive redistribution. We need to think about how (and whether) to pursue perpetual growth in terms of ensuring that we have enough output to support our growing populations but also in terms of the structure of society we want to end up with.
Rising Inequality
As has come to the forefront of the political debate since 2008, we are already seeing rising inequality in society, in part due to the stagnation of the median wage.
Sir Christopher Pissarides, Nobel Laureate in Economics and Professor at the London School of Economics, offered three explanations for the depression of wages. Firstly, technology may have pushed down wages as low-skilled workers are competing with robots and computers. Second, immigration may have put further pressure on low-skilled workers (although I note that the evidence on this is mixed due to the demand multiplier associated with an influx of migrants that can lead to the creation of new jobs). Third, the liberalisation of the financial sector — which includes the alignment of management interests with shareholder interests through executive compensation — and the reduction in the power of trade unions may also have contributed to the depression of wages relative to productivity that we have seen since the 1970s. The panel warned that this situation could worsen if we do not start to invest more in human capital.
But interestingly, Stefano Scarpetta, Director of Employment, Labour and Social Affairs at the OECD, explained that on-the-job training is biased against those who need it most to boost their skills and earning potential. If the solution to our employment problem is training and education then this serves as a warning that we will need to actively take measures if we want the potential benefits of automation and flexible working practices to be shared equally.
The Robots are Coming
There was some discussion of the various attempts at estimating how many of today’s jobs will be automated in the future. The infamous paper by Frey and Osborne at Oxford University in 2013 hit headlines with the prediction that as many as 47% of US jobs would be computerised in the future, although the OECD has a more modest calculation of 9%.
In fact neither paper actually predicts how many jobs will be automated, but rather how many could be. The reality is that much work will be automated — we would not invest in robots on a mass scale if they did not do useful work — but that work will map onto existing jobs to varying degrees. Tom Standage called to mind the old lump of labour fallacy which holds that there is only a finite amount of work that needs to be done in the economy, when in fact automation leads to greater productivity, falling output prices, workers being redeployed elsewhere in the economy, and demand responding to soak up the increased output.
Indeed, it is the least fulfilling, most monotonous types of work that are most easily automated, which means that we should be free to pursue more meaningful, human work. The types of work that do not lend themselves to automation are those requiring a human touch (such as childcare), physical tasks requiring human dexterity, and highly intellectual and creative tasks (not that computers and robots are not already creating music and art but there will always be a demand for human-created work I think).
As Pissarides put it, it is not that there will be no jobs for people to do, it is that we will need to make these jobs more socially respectable. One way to do this, as in Sweden, is to have a more redistributive tax and benefits system which places a social value on those who work in those fields.
We tend to think of Artificial Intelligence as competing with us for jobs, but several of the panellists described how computing power is being put to work in service of helping people find the right jobs. We heard that a growing trend in job-matching was in the validation and universal certification of skills. In order for a computer to be able to match a candidate to a job the worker must be able to enumerate (and prove) the skills they possess whilst the employer must be able to delineate precisely the nature of the job advertised. This strikes me as requiring humans to think more like machines in categorising their work and skills.
Computers have not as yet managed to eliminate the search frictions inherent in the job marketplace, and there is also a risk that an automated system may replace human biases with technical ones (such as filtering based on location of candidate, where location is correlated to social class or race).
Diane Gherson described the fascinating uses of AI and predictive analytics at IBM, including its use to identify those existing employees that are most likely to leave the company (which could save that awkward “I quit!” conversation with your boss…) and the deployment of a personalised “Netflix for learning” system. This goes beyond suggesting material it thinks the user would be interested in and measures the employee’s propensity to learn so as to guide IBM’s investment in human capital.
Skills for the Future
Propensity to learn or “learnability” was mentioned by a few speakers as the key skill needed by employees now and in the future. This ties-in with the flexibility that several participants said would come to characterise work in the future, as individuals will be called upon to serve different roles throughout their career. On the flip-side we can frame this as more autonomy, which John Howkins emphasised is essential to creative work.
If part of the solution is lifelong learning then we will need the infrastructure to support this, both in the provision of the training itself but also to support workers as they take time off to pursue investment in their human capital. It seems that increasingly this will be the responsibility of the worker, not the employer.
Culture
Through some advisory work I am doing with B Lab UK I have become increasingly interested in the possibility of repurposing the modern corporation to generate not just profits but also benefits for workers, the community and the environment. The corporation has proven itself to be a vehicle for incredible wealth creation, but we are now seeing signs that the dominance of shareholder primacy as a principle and the single-minded pursuit of profits has a detrimental impact on society and the environment.
Culture is at the heart of changing the role of the firm in the economy. Ajaz Ahmed, CEO and Founder of AKQA, spoke passionately about how he had built a culture of respect for people and the environment into the DNA of his company. The traditional wisdom that success is predicated on pure efficiency has a counter-point in AKQA which is not only one of the most successful digital agencies but which was also rated as the third best place to work in the UK on Glassdoor. Ahmed spoke about things like creating teams that promote psychological safety and training employees in mindfulness, and this from the head of a company that has been part of the advertising behemoth WPP since 2012.
Jean Oelwang, President and Trustee of Virgin Unite and Senior Partner at The B Project, emphasised that having a clear and compelling purpose leads to effectiveness in modern business. This in turn leads to impact and to happy, engaged employees. It is not just a recruitment strategy, it is an entirely new way of doing business that sees the company as a hub in which various stakeholders convene and invest to advance specified aims. The goal is to accurately identify and communicate those aims to further the purposes of the organisation.
A powerful driver of engagement is decentralisation. Vlatka Hlupic, CEO of The Management Shift, explained that centralised organisational processes may have worked in the old productive economy, where efficiency was the key driver. But where innovation and creativity are key, these are stifled by centralisation and over-management. This sentiment was reinforced by Nilan Peiris, VP of Growth at Transferwise, who described how their decentralised “autonomous independent teams” are able to respond to customer needs and dynamically deliver consistent growth — without having to report back up the chain of command.
Conclusion
One aspect of the future of work that I did not think was discussed in nearly enough detail is the implication of the fact that all of the above themes are global in nature. Individual countries will come up with their own policy responses, but the forces themselves know no boundaries. An adequate response will require a global mindset and perhaps some level of international cooperation, which is exactly the reason that the UK’s now-impending departure from the EU seems so backwards.
Indeed the question of employment is inherently a global one, even if we rarely think of it in those terms, because it comes down to whether and how we can fine something meaningful and productive for every single potential worker to do. This raises two further questions for consideration: 1. How are the global ecological impacts of production and consumption and work to be managed? And 2. How can we ensure that all workers enjoy basic human rights and the possibility to flourish?
I came away from the conference with the thought that we have at our disposal the tools to forge a hopeful and prosperous future of work but that the onus is on us to proactively do something about it rather than allow the inevitable tide of technology to wash over us. Many of the technologies and innovations that we will be compelled to respond to are so new that we are just at the beginning of figuring out what to do to ensure a happy, productive, and fair future of work. We need to get serious and specific about what we want that future to look like. Then we need to go make that future happen.
