Lost in all the noise about the “middle class squeeze”, angry workers “who have been left behind”, and that 6 out of 10 Americans say the “economy is on the wrong track” is another story which has not been widely reported. The US has created a new-gen labor economy which the rest of world will gradually adopt.
No single person designed this “thing” or trademarked it. Some have called it the gig or indie economy but that barely touches on the broad dimensions I will describe. No politician has taken credit for it — so far. In fact, few even know about it.
I found it in through pattern recognition I did for my new book, Silicon Collar. I was looking for trend lines on how societies gradually absorb automation (see myZDNet post for a summary), and I stumbled across this remarkable new organism.
First some context.
In the 50s, a company could stay on the S&P 500 list for 60 years, today they barely last 20 years. With that shortened corporate life span, the concept of corporate lifetime employment and pensions are a pipe dream. Actually only 4–5 generations in all of human history enjoyed that lifestyle (and honestly many did not enjoy the bureaucracy which came with it) so it was an aberration. Our agrarian ancestors did not avail , neither will our digital descendants.
And it’s not just US companies — German, Japanese, Chinese face the same pressures. But the US has adapted a bit better.
Our companies have moved to what I call in the book “Clover-leaf organizations”. Management philosopher Charles Handy was prescient when he wrote in his 1989 book The Age of Unreason about the three leaves of the “Shamrock Organization.” I continue in the book
“You could argue that if Handy had written the book today he would consider a four-leaf clover as his defining metaphor, with the fourth leaf covering machines, robots, and other automation as another source of the “talent”
Actually, clovers can have many more leaves. The Guinness World Records says one was found with 56 leaves. If you look at all the ways organizations utilize talent these days, Handy’s three leaves have many derivatives, most enabled by advances in technology.
Apple has several thousand employees who develop products which are then sold in its retail stores. Its contract manufacturer, Foxconn, employs thousands of employees and robots in its manufacturing plants in China. Those plants also have interns and other staff hired through third-party recruitment firms. Apple’s third-party logistics providers like Fedex have a similar mix of man and machine.. There are also millions of associated jobs that are not on Apple’s payroll around the apps, music, movies, books, and other items in the Apple ecosystem. Just around apps, Apple claims to support a broad community: “Nearly three-quarters of those jobs — over 1.4 million — are attributable to the community of app creators, software engineers and entrepreneurs building apps for iOS, as well as non-IT jobs supported directly and indirectly through the app economy.”It also says, “The iOS app economy has created 1.2 million jobs in Europe and 1.4 million jobs in China.”
I provide other examples in the book. But look what that has done for our workers. We have a choice of 840 occupations the Bureau of Labor Statistics (BLS) is tracking. The list will be updated in 2018 and I expect it will be longer and have more STEM influence. Our workers are getting 2nd, 3rd, later acts in life, No other country has so many new gen opportunities — franchises (about 10 million jobs), platforms (Apple, Amazon fulfillment, eBay work at home, Uber etc — about 20 million part time for now but rapidly changing ), new services — alternative healthcare, ethnic groceries, pet/child care etc.(another 5 million). I am not even including Silicon Valley type entrepreneurship opportunities in energy, space, food, IT etc.
In this new gen economy, machines will play a much bigger role. Amazon has delivered 50 price cuts around its AWS in the last decade. Could not do it without a heavy mix of machines. UPS averages 1 accident per million miles of driving. Could not do it without all kinds of telematics in their trucks. Foxconn has delivered billions of high-quality Apple and other devices. Could not have done it without precision machinery and bots. Machines will take our best new gen workers and make them exemplary.
But our corporate policies have not kept up. Very few organizations have a complete map of all the talent they are leveraging. That’s remarkable, considering that for many companies 80% to 90% of their talent (like Apple above) is now “off balance sheet” — not directly on their payroll. Companies have insanely long interview processes when employees are changing jobs every few years.
Our public policies have not kept up. We need portable benefits and safety nets for their new work life. Government data on the changing labor market is outdated. The BLS classification mentioned above is not due till 2018. Once a decade in this fast moving world? Our politicians keep hammering Apple, GE and others to bring jobs back. Which of those “off balance sheet” jobs? I am seeing extreme thinking like Universal Basic Income in preparation for jobless futures. There will be plenty of jobs — just very different ones.
No wonder, many of our workers have not kept up and are bewildered and angry.
Shame on us, collectively. We have seen it coming several times in our lifetimes. Cities like Pittsburgh, Detroit and others have gone through near death experiences and have come out very differently. We need to do the same in our individual lives. Reinvent, continually, not keep pining for the past
A friend of mine wryly observes there are only 9 lifetime jobs left. They are in Washington DC. And most lucky to get it, have to wait till they are in their 60s. As we are seeing with a candidate trying for the job today, the recruiting process is extremely painful.
In turn, however, we have ended up with a remarkable new labor economy, that our parents would have drooled to be part of.
It’s reason to celebrate, not be angry!
(Cross-posted @ Deal Architect)