What will be the critical skills in the workplace twenty years from now? That question is haunting workers and parents of future workers aware that we are on the brink of profound changes in the workplace. The better we get prepared for that future, smoother will be the transition.
The fourth industrial revolution, powered by digital technologies is disrupting every business model and pre-conceived notion of value creation and consequently, work. Technologies like Automation, Artificial Intelligence, and Robotics can replace human labor where we have not deemed possible before. Areas that require high cognition and contextualization, tasks demanding perception, discernment, comprehension, or insights, are no longer a challenge to the new bots. Smarter algorithms are challenging creativity and innovation, areas where machines will potentially replace humans with advantages too - including music and literature. New generative algorithms can be faster and more productive than scientists. Considering technology development do not follow our linear thinking but grows exponentially, we can imagine what those machines will be doing in ten years beyond driving our cars. Touché!
Not a big fan of the Armageddon of jobs.
It was entertaining to watch Kasparov being defeated by Deep Blue in 1997 for the first time, but that event started to pave the road for machine superiority. AI machines can process more data, cross more information and now interpret them faster and more efficiently than us. And more importantly, more and more information is available about everything and everyone - every choice made, product purchased, image pictured, and service registered - making impossible for our human brains to process all that, online, real time. We will need our AI friends to expand our cognitive skills, to find new solutions and break into new models. They will help us to make obsolete toxic workplaces and co-workers, bullying managers, unproductive meetings and even the payroll.
Our jobs will radically change in nature, function, and duration. We might keep witnessing the growth of the gig economy for a while, but I firmly believe those jobs will tend to be replaced by machines eventually, as the economies of scale are tremendous - imagine what a robotic manicure can bring regarding scale and innovation to customers. And at a fraction of the cost.
The real demand in the future will live on the high end of both the intellectual and emotional spectra. In a world where computers can do the labor, we will focus on moving science and human condition ahead. High intellectual development has always required simultaneous moral and ethics evolution. It is easy to see the events around nuclear weapons, clones and space exploration where some of the most desperate discussions are precisely the ethics around them and how to use those technologies to the wellbeing of humankind. Artificial Intelligence will require the same and maybe more and will throw most of us into new careers, willing it or not.
Multiple, Transferable and Compassionate Skills
Based on the lessons of previous high impact innovation adoption, I project three types of skills that will be in high demand within one or two decades. They are multiple professional skills, transferable skills, and compassionate skills.
Most of the high intellectual jobs demand will happen on the crossing of two or more professions. If e-discovery eliminates the need for Jr. Counselors and Paralegal's, on the other end, we will need Lawyers with Computing Science skills to create new algorithms, for example. If robots will master small surgeries and replicate them at scale, we will need more research doctors with mechatronic skills to develop and test new procedures. Before tapping into the job market, college students should define their area of interest and learn which professions combined are impacting that field. Education is a must.
Most of the intellectual work in the future will be developed collectively. Collaboration, communication skills, and teamwork, for example, will be critical to any job in any area. Those skills will be essential for one to perform in new environments, mostly virtual, and get things done with and through others. The exciting aspect is that most of those skills once mastered can be applied in any job or project. Professionals should carefully choose what transferable skills they want to learn and how to demonstrate them in every engagement.
It is clear by now that most of the jobs we understand as middle-class ones like management, supervision and office jobs will be gone fast. We will have more free time and live longer. We will need to take care of each other more and dedicate more time to our children education. We will have a demand to discuss ethics and moral in many new business areas. Our social efforts will be intensified, and public organizations will demand new services and new professionals. It will be a time where lots of new jobs will require compassion and humane approach. It is time to grow as human beings beyond our intellects and learn how to be compassionate and help each other.
Join us at collectivebrains to discuss the future of jobs and education, and to help us find and invest in the best solutions.
They cannot be discussed separately as together they will shape our future.
We have been moving fast to be predominantly connected information societies across the globe. Just for clarity, an Information Society is a society in which the creation, distribution, and manipulation of information have become the most significant economic and cultural activity, and other ones as agriculture and industrialization became less relevant overall.
POWER UP YOUR BRAINS
We are also living a steep acceleration of new technologies development both regarding the breadth of innovation and depth of changes in information distribution, forcing us to adapt to new levels of productivity and online presence. That is the case of the "big data" and cloud-based solutions enabling virtual assistants, on-demand streaming, real-time collaboration, virtual meetings, traffic information exchange and much more. The pace is breath-taking if you consider that ten years ago there was no iPhone or cars equipped with GPS. That five years ago, virtual assistants, drones, cloud base software, Artificial Intelligence were limited to labs and hacking could not stop the entire electrical power grid throwing us to Armageddon. The signals are that the acceleration will just continue to grow. To a point, where the human brain will not be enough to follow and adapt. At that point, for us to be economically productive, we will have to leverage our virtual assistants powered by artificial intelligence to amplify our cognitive capacity, our data processing capacity and contextualization, and to point us to the better direction through power analytics. Computers will not only drive our cars but will shape our agenda, decision making and even behaviors. All that is not science fiction anymore, but pure linear projection.
SOMETHING IS WRONG WITH THIS PICTURE
I am a big believer that technology comes to help us have a better life overall, with more convenience and wealth to be distributed. But every historical big technology wave, known as Industrial Revolutions, came with a lot of pain for societies embedded in their nature - disruption. That means ordinary people lose their businesses or jobs and must be re-equipped to a new system usually through higher education and specialization. What is unique about the current fourth industrial revolution we are going through is the time we are giving people to adapt. The previous three industrial revolutions allowed people to be re-skilled over many decades. In our present one, we will have less than twenty years to adjust - what is not enough, and we are living on the brink of promoting the most profound social inequality of our recent history. The effect of that process could be devastating to our economy and hundreds of millions of people.
Here is the evidence of the path we are paving to ourselves. First, the economy has been growing, but wages are not at a decent pace. The disconnection might be explained by at least one simple fact - middle-class jobs have been steadily eliminated, and the new jobs available do not pay as well as the ones removed. Look at the data in this study. People are starting to be left out by new technologies, and they rarely can be practically re-skilled in time. Check what is beginning to happen on the west coast with the unprecedented growth of the homeless population. Those trends are real, and they will not get better without profound changes in our approach. We are not talking about few coal-related jobs anymore but millions and millions of office jobs being eliminated in few years among others. Our middle class is in jeopardy, and social inequality is on the rise. How long our social fabric can hold until it starts to tear apart?
GOOD AND BAD OF BUSINESS CONCENTRATION
Those trends are especially concerning vis-a-vis the contributions new tech and the tax reform in Congress can bring to the problem. If we do not look at the full picture we might end-up just accelerating the economic gap of our population, throwing more and more people under the poverty line and losing ground to some of the more developed economies in Europe and Asia.
The current fundamental question is how much concentration and autonomy should we allow tech corporations to have. Remember we are moving into an information society, and big tech companies are currently more significant than some countries, reaching market caps of over one trillion dollars. Denmark, for example, has appointed an ambassador to Silicon Valley given its higher impact on their nation.
Big companies bring bigger profits, given lower competition. Those gains might foster more and faster innovation, but at the same time contribute to higher income concentrations as they tend to eliminate jobs in every merger or acquisition and pay dividends predominantly to affluent investors. Concomitantly, big corporations can spend more on lobby to influence our legislators to rule in favor of their causes.
That seems to be the case of Net Neutrality vote this week. FCC has been ignoring the constant scream in favor of net neutrality, ruling in favor of the big Network companies. Todd Achilles clear explain in this article the effects of competition void in the industry. Now big corporations like Verizon, AT&T, and Comcast can rule out small and medium businesses competitor's content, as they do not have deep pockets to pay for fast lanes and traffic tolls on the internet. The result is more concentration, less competition, more inequality. It is understandable that businesses must protect their interests and grow. And they will do that as their priority. Comcast, for example, has removed in no time their pledge in favor of Net Neutrality from their website just before the vote in FCC - shameful. That also tells us that the ethics discussion will tend to be less critical than profit potential and that Ajit Pai, FCC Chairman argument is no sense. Companies will rule our access to information the same way the Chinese Government controls it in China, just a different power ruler.
That is the case of the tax reform. By taxing the top 1% and the big corporations less, it will bring more income concentration and more social inequality to this already debilitated society. The bet that middle-class taxes will help to hold the deficit back is also not plausible given middle-class jobs have been eliminated faster than others. A rising debt will keep struggling our school system and lowering the quality of education to the clear majority of our kids, compromising their future. Higher and better education is the only way to move stronger through this new industrial revolution. It seems our legislators are tied to old paradigms, not understanding that jobs will be primarily virtual and mobile, and companies will employ better-prepared people in any country - there will be every time fewer borders for new jobs.
That will be the case of AI if we do not act fast. AI will create new jobs in the future, but there will be faster elimination first. Every WEF (world economic forum) study shows that. Today three companies concentrate AI development- Google, Amazon, and Microsoft, and there is no government agency overlooking its development and intermediating a healthy discussion with critical social groups. We need to bring everyone to their senses and answer how we can discuss ethics without slowing AI development. Check Oren Etzioni OP-ED in the NYT. It is time to understand AI social impact and implement the solutions to make our lives better, and not worse.
The FCC decision on net neutrality, the lack of action on AI and the tax reform direction in Congress tell us that social inequality will keep growing, wages not and the benefits of the economic expansion will be perceived only by the top 1% bracket of the population. The US will lose competitiveness as our kids are not adequately educated. Time to call our legislators and demand a different approach. Time to choose the companies you do business with and from whom you buy services. Time to invest in new businesses and new solutions to help create a better future. Join us at collectivebrains.
Salaries will not grow in the next decades, and it is essential to understand the reasons and the impact on all of us. This week, CNN released an article entitled This is the biggest mystery in the U.S. economy. "Who killed inflation?", they asked. "It's the most puzzling problem in the U.S. economy today. Even Federal Reserve leaders are scratching their heads. Normally in a healthy economy, as unemployment goes down, workers earn more in their paychecks and prices for goods go up -- ideally more than 2% annually".
But that is not the case.
We might find a reasonable explanation on the dynamics of the job market impacted by the ongoing digital revolution. For most of us, it has been a while since last significant salary raise. Smart marketers are acutely aware of the trend, holding prices of services and goods down, and preserving a healthy demand growth while pushing inflation to lower levels. Despite many macroeconomic dynamics the FED and other organisms are looking up to solve the puzzle, we might have a plausible answer in the subtleties of the job market. Here is what we at Collective Brains think about this.
Many simultaneous micro-dynamics are ongoing, resulting in an unforeseen jobs creation polarization process on the two ends of the wages spectrum. The trend is an explosion of jobs in the gig economy and other low wage ones on one end, and a healthy demand for highly educated jobs, especially STEM ones on the other. In the middle, every position is at risk of displacement as most companies aim to increase profitability by deploying new technologies and flatting the organization. Technologies like automation, machine learning, AI, and robotics are progressively replacing human jobs at scale, and that is especially true for that middle management population, where computers are starting to understand context, process Natural Language and develop cognitive capabilities. The aim is to eliminate jobs with higher compensation by both reducing managerial levels and organization levels, with a positive impact on the bottom line. Top lines can be positively impacted too as the process also creates more agility and increase employee’s overall efficiency, freeing time to give customers more attention.
At a macroeconomy level, even though we might see low unemployment rates, the numerically subtle tradeoff of highly compensated jobs by the explosion of low wage ones will keep average labor earnings stagnated or declining. That trend shows the real threat the fourth industrial revolution is posing on the middle class in the next decades, and numbers are starting to show.
Let's look at some of them.
First, the most recent Bureau of Labor Statistics (BLS) study projecting job growth by major occupational groups to the year 2024 shows that out of the top 15 occupations with the most job growth since 2014, 12 or 80% of them present median annual wage below the national average of 35,540 dollars. It seems the job market is skewing lower by job profile and driving growth of occupations that make less money (table 6).
The same study shows that in the 2014-24 decade (table 4), those new jobs will have a weighted median annual wage average of 44,220 dollars what could be good news as it represents a growth of 24.4% over the overall 2014 market median. The problem is that the projection does not go deep to understand the impact of new technologies like automation, machine learning, AI, and robotics. The last predictions of the effects of those technologies in the labor market show that in average, 30% of all the activities performed has a potential to be replaced by a bot (depending on the profession). Just to have a rough estimate and get a grip on the impact of those technologies on wages, we can apply that percentage to the occupations highly exposed to information technology only. The weighted median projection will fall to 34,817 dollars, 2% below the 2014 national average. That means, no wages growth in the next seven years. If we consider those projections might be conservative as technology adoption and deployment tend to escalate faster than most forecasts, we might even since the median wage declining, what could also trigger prices deflation.
Undoubtedly that is not a comfortable conversation for big corporations or policymakers while clear solutions are not identified to create a counter cycle. Big businesses have already started to rationalize their payrolls and please note the group has a more prominent participation in middle management types of roles. Despite the stock market growth in the last three years, with S&P 500 adding 31% of value in average, payrolls are reduced steadily in many cases. Fewer industries are adding jobs. In most of the cases, those are the ones with salaries below the current national average as fast food chains and retailers. Most tech sector companies are also adding new high education jobs, but not necessarily increasing the annual median or being enough to offset losses. Here is a closer look at the biggest employers in the US.
As the fourth industrial revolution deploys its disruption in the job market, we urge tech companies developing new technologies and lawmakers to act fast, and think on real solutions. We are raising awareness and motivate people to be actively engaged and ready to embrace this future as the full impact of those technologies will hit in a decade or so. At collectivebrains.org we invest in startups connected with the future of work and the future of education and tech companies leading the AI agenda.
Join us on creating a better future with equal opportunity to everyone. Help us find solutions for the future of work.
A constellation is a group of stars that are considered to form imaginary outlines or meaningful patterns on the celestial sphere. Similarly, we could call a business constellation a group of businesses that temporarily align around a significant purpose. Companies that get together to complement each other and cooperate towards a broad and impactful objective. That notion differs from traditional business partnerships by its impact and number of collaborators.
"Knowledge is a function of being. When there is a change in the being of the knower, there is a corresponding change in the nature and amount of knowing", writes Aldous Huxley in his book. We are living the fourth industrial revolution, and we need to recollect and reassess our knowledge about how businesses interact, compete and collaborate. Digital and new technologies are disrupting companies, business channels, business models, jobs and entire industries. Simultaneously, new generations are coming to the workplace with different mentality and understanding of relationship models. Generations born with broader social reach, real-time virtual collaboration and need to make the difference. The result is a significant shake on before understood permanent business structures, demolishing old patterns of supply-demand dominance and creating entire new ecosystems motivated to collaborate, deliver quantic leaps in human progress, and to launch reinvigorated business concepts.
NEW BUSINESS MODELS
New business models have surged in recent years and new terms coined to define them.
"Frenemies" are companies that compete in one area and are business partners in another. Samsung manufactures most of the I-phone screens and yet is the largest manufacturer of Android phones, making Apple its archrival on Smartphones and the most prominent customer at the same time. Amazon and Microsoft just announced Gluon, a partnership to deliver a new software tool for developers that makes it easier for developers to build AI/machine learning systems. Both are the most significant contenders on Cloud computing solutions, but they need help to fight Google in that space.
"Customer-Partner" is another model that boomed along with the Cloud tech growth. On these networks, a company can be simultaneously a user of one product, a reseller of your solutions and partner on your technology. Let's get a seller of Microsoft Azure as one example - typically a partner. The partner will develop solutions based on Azure and sell to its customer base. Those solutions might live in their websites or transact in Microsoft’s marketplace. That same partner might also resell Office365, and use it as their productivity solution. In that case, the partner will be at the same time a customer of Microsoft SaaS and IaaS and a partner on PaaS, increasing mutual dependency.
"Business ecosystems" are created around big companies that offer market wide strategic solutions. Amazon is a good example of a big business ecosystem anchor, and one of high growth. "Amazon ecosystem, made up of merchants, writers, reviewers, publishers, apps developers, and the information market of commentators, analysts, journalists and feature writers who get the word out about opportunity on the Amazon platform", says the Forbes article. The critical fundamental on those business relationships is that every entity works to the success of the ecosystem and depend on it at the same time. So, a retailer using Amazon virtual distribution system will profit more if the ecosystem grows and vice versa.
New ideas, new models, but we can do better.
BRAVE NEW WORLD
The world has experienced unparalleled growth in the last seven decades and wealth has multiplied and spread. That big new economy we have inherited from the "baby boomers" came with its challenges too. The way we explore resources, fuel growth and expand demand became not sustainable. Time to pass the baton to new thinkers. Especially "millennials", came to the workplace to challenge those notions. Growth can be sustainable, society can be more equitable, and the workplace can be more motivating and fun. Businesses around the globe recognized a new expanding market and started to adapt to this new consumer-user-entrepreneur-employee demands. Those same companies embraced new causes and purposes - recycling, no-GMO, organic, sustainable, ethical, socially responsible, equal opportunity, diversity and more - as never.
A new class of attraction and collaboration has surged. The one motivated by genuine purpose. People want to express their point of view, voice their passions and meaning, and create change by adopting a product or brand and choosing where to work. Businesses recognized the power of purpose and brought it to the cover of their strategies.
At the same time, the new generations can leverage the digital economy to disrupt businesses they are not happy about, and create their clusters when necessary. Or collaborate with bigger ones where there is opportunity.
That movement started to bring closer businesses aligned by meaningful purpose and boost collaboration to an entirely new level. Companies are partnering in leveraging services, aggregating solutions, changing regulations and helping each other to achieve bigger results and transformation. Those are Business Constellations, conceptual networks of individuals and businesses that get together to solve a problem or innovate with no or low formality. Businesses that come together and go at same speed, and make significant progress in critical areas of social, moral, economic and technological development. Companies may be part of many constellations at same time and collaborate on different projects in multiple purposes. A company can offer equal opportunity, partner with the local mayor on developing education and create new technology to support an efficient classroom all at the same time. What constellations is your company taking an active role? We at collectivebrains would love to hear your feedback and ideas on the future of work. Please join our constellation.
Technology changes everything. Can you imagine life without iPhone, WhatsApp, Uber or GPS? We are so much more productive than ten years ago due to those and other relevant technologies. Since the first industrial revolution, we have been harvesting significant productivity gains, improving quality of life and dedicating way less time on the traditional concept of work. Between 1880 and 1995 the amount of work per day fell nearly in half, allowing leisure time to more than triple, and as per the projection, it will continue growing in the next decades. And what do we do with all that free time?
LAY BACK AND RELAX
The leisure industry is showing unprecedented growth to help us occupy all that free time. Have a look at the content production revolution for movie theaters and cable, the exponential growth of tourism, and the proliferation of events, gourmet restaurants, and wine tastings. All are results of productivity gains and more free time to spend the wealth we have been accumulating. To add to the picture social trends are bringing new forces into the workplace. Highly demanded by the new talent the work contract is becoming every time more flexible. Mobility options, virtual offices, part-time jobs and engagement by the project are helping to create more flexible hours too. The result is a better quality of life and more discretionary time. All that is uncontested progress, however, we can do more with all that time.
Another industry anchored in productivity gains and showing steady growth is the online education. People tuned in the future of work are using their free time to learn and acquire new skills too. The report by Docebo shows the total market for e-learning in 2016 was $51.8B growing in average 7.9% per year in the 2012-16 period. But online courses are not the only solutions out there.
SOLUTIONS FOR THE FUTURE OF WORK
As we look for new investment opportunities at collectivebrains.org, one new company called my attention in Brazil. TOP2YOU has created a very friendly tool to connect top executives with anyone in need of business or career advice, or even talking about new aspirations and innovation ideas. HR professionals are jumping in the tool to provide external mentoring to their employees either developing further high potentials or helping performance laggards to grow. Top-ranked executives are also using the tool to discuss business strategy and innovation paths with other experienced professionals of the market. It is very simple to schedule sessions with the leaders they want to talk. The tool removes all the bureaucracy and communication barriers one would usually encounter to reach and talk to such renown professionals.
TOP2YOU is not only for large enterprises but to all professionals willing to rethink their careers, solve a business problem or find inspiration. A great resource for small businesses, entrepreneurs and independent workers too. Connecting with people that inspires you just became as simple as choose, click, and talk. As the job market changes and the workplace landscape reinvents itself, we need to be on top of our game. The tool can make the difference to rethink one's professional future.
That was what happened to Simone Madrid, an executive search pro who has seen the risk of disintermediation in the headhunting industry as a significant threat. Technology is changing the landscape, and the growth of online recruiting is undermining many of the companies in the sector. Simone decided not just to wait and see. She saw an enormous potential for people development beyond recruitment. In no time, she joined efforts with Thiago Correia and Marcio Minuzzi and created TOP2YOU. Thiago path is rooted in the investment market. He is an Associated investor at Gavea Angels, and immediately recognized the business potential of the idea in a country that is the 7th largest economy on the planet, and yet not well served by new tech solutions. Marcio is the third partner. He is still employed at a big multinational company but decided to try the entrepreneurship with the blessing of his employer. He brings digital marketing expertise to the team. The three are great examples of the entrepreneur spirit required to thrive under the digital revolution. The future of work is closer than we think. It is time to reinvent ourselves.