Our world is facing a crisis cubed: jobs are disappearing faster than they are being created; companies are struggling to attract people with the right skills; and people rightly worry how new technology will threaten their livelihood.
These global challenges affect developing countries as much as highly industrialized economies. I have heard plenty of suggestions from all corners that this crisis can be solved by “creating more jobs”.
It’s increasingly clear to me that creating more jobs is not enough, nor is it the real solution. This solution is based on a big misunderstanding. To tackle this crisis cubed, we need to focus on not just jobs but on people earning incomes. This requires us to develop a new model of work.
What is clear is that the transformations that are now taking place worldwide, resulting in the loss of jobs, are caused by forces we cannot alter. The disruption of our world of work is the result of a tectonic shift just as dramatic as industrialization and urbanization - and it occurs along three fault lines:
1. Technology: The speed and breadth of today’s innovation affect every single job and skillset. Automation, artificial intelligence, Big Data analytics, the Internet of Things and mobile technologies are levelling the playing field – not only geographically but also across the spectrum of businesses from big to small. Not all of this disruption is positive. New technologies could result in a net loss of more than 5 million jobs by 2020, warns a recent World Economic Forum report.
2. Talent: We are facing a massive skills gap. Today’s education systems simply can’t keep up with the rapid pace of change. Too many of today’s graduates are merely not business-ready for the jobs that now exist. For the rest who may not have the academic credentials and special skills, they face barriers as well, as the non-cognitive skills they might possess are often discounted.
3. Millennials: In 10 years, the millennial generation will make up 75% of the global workforce. They are different, very different. Not only are they digital natives, they also have a different set of values; they want purpose in their lives, flexibility with their time and a healthy work-life balance. More than half don’t even want a job but want instead to do something on their own.
This tectonic shift is tearing down many familiar features of the economic landscape to which we have become accustomed. Take corporations: yes, they have been around for two centuries, and during their time were the primary creator of “jobs”. Yet, corporations as we have known them may soon have had their day. They will run out of skilled workers and will also fail to produce enough jobs to provide to those who want to work within the traditional definition of jobs. Additionally, Millennials, who are fast becoming the core of the global workforce, have little appetite for jobs and careers, since they offer too much structure and too little personal fulfilment.
What did people do before there were jobs?
Neither governments nor companies can become sustainable engines of job creation. But then this crisis is not actually about “jobs”. Let’s go to the early 19th century: what did people do before there were jobs? Well, certainly they worked - usually for themselves - in agriculture, as craftspeople, as tradespeople or in other ways as part of their local economy.
Image: John Constable's The Hay Wain, finished in 1821
This “cottage industry” work lacked scale; it was local by necessity. When corporations came along in the 19th century, they simply took these workers, organized them and with the aid of steam-powered factories and early industrializing technology, created focus, efficiency and scale. They brought us the big corporations we now have today and that worked for a long time. Yet this model is fast becoming obsolete.
Today’s most valuable companies, like Apple, employ a proportionally small number of people. At the same time the job market is shrinking almost everywhere because of the forces mentioned above. We simply must change our model of work and look beyond traditional jobs, beyond governments, beyond corporations. We must develop concepts that provide the flexibility and resilience needed for people to thrive amidst this massive disruption.
The whole world can't be Bill Gates
Rolling out the alternative to a job with the government or with a corporation requires focusing on start-ups, self-employment, self-made work, entrepreneurship. Yet, for most people many of these notions conjure up images of larger-than-life figures, of a Bill Gates or Mark Zuckerberg or, perhaps, some teenagers who - fuelled by take-away pizza - burn the midnight oil coding new apps. When we hear terms like these, we think of a path that’s risky, requiring top education and out-sized intelligence and ambition to succeed.
I won’t offer a ready-made solution that will make our current crisis cubed simply go away. But I will offer that in my 30 years of living and working in the Americas, Europe, and Asia regarding, I have seen how income can be created by many outside the formal structures of government and corporations and how people who have taken this route can thrive and shape their own future.
Company minus hierarchy equals collaboration
Take away the hierarchies of today’s corporations and what are we left with? At their core, companies are a collection of people engaged in collaborative efforts. It is this collaboration that is at the heart of our new model of work.
Let’s look at it from the perspective of individuals. What they need for success are business templates that leverage their skills, match their interests and - most importantly - nurture the right mindset that will allow them to be collaborators in this emerging new economy. They should not just be trained with cognitive skills or STEM smarts, but also non-cognitive skills such as creativity, self-discipline, resourcefulness, endurance – none of which are measured by tests and few of which are taught in school.
People with those non-cognitive skills may not feel comfortable calling themselves entrepreneurs … but from a mindset perspective they are! And with the right tested templates, models and tools, they will be able to generate an income that allows them to be independent and stand on their own two feet.
Just last week I used my Uber app and was picked up by an older middle-aged woman who told me she previously had been cleaning houses a few days a week. Now, she proudly reported, she was making much more money and with the flexibility the work offered, was able to drop off and pick up her granddaughter from school each day. I asked what new skills she had to learn. “None,” she said. She already knew how to drive, she knew the area, and always loved meeting new people.
WeWork, another disruptive business model, is a chain of shared office spaces that rents workspaces on a pay-as-you-go basis for budding entrepreneurs. The spaces are actually working social incubators where, for example, a computer whiz meets up with a graphic designer … Think Steve Jobs and Steve Wozniak.
First, though, we need to flip any mismatched expectations; we have to help people realize that striking out by yourself is not a necessity but an opportunity, and that the risk can be managed. Individuals should feel confident to operate at whichever scale they feel comfortable – small and local or dynamic, scalable and global; fully independent or collaborating with a larger corporation.
Lessons from the world's most valuable companies
Corporations, meanwhile, will have to abandon their traditional hierarchies and structures. Take the world’s two most valuable companies, Apple and Google: their strength does not come from making things but from the collaboration within the huge ecosystems they have created. Think Nike, too. They are designers and marketers supported by collaborative companies and individuals.
So to survive, corporations have to reinvent themselves as conveners of collaborators. That is their new template. They have to morph into collaborative ecosystems - with their own rules and community ethos - in which individuals can plug in their skills. The collaboration economy can be our new model of work. This may require companies to change their business model; or it could be as simple as introducing dynamic and flexible procurement systems.
I’ll make no bones about it: the transition to this collaboration economy won’t be easy. It can’t be. The three fault lines – technology, talent and demographics – have ruptured, and the disruption brought on by this tectonic shift is simply too big.
But I’m an optimist at heart, not least because during my entire career I have met so many people who were able to turn their lives around simply because they were given the right template and mentoring.
It is now our job to spot the opportunities in the disruption and equip people not just to cope but to thrive beyond jobs and beyond corporations.