During the last year I’ve watched the conversation among economists and labor experts go from the traditional “Automation always destroy jobs but then it creates more jobs” to “Uh, maybe it’s different this time.”
It is different this time. Between robots, sophisticated artificial intelligence, and flexible global outsourcing, we’re going to eliminate a lot of jobs and it’s no longer clear where the new jobs--at least well-paying ones--will come from. A detailed Oxford University analysis last year said that nearly half of current jobs can be automated.
Coincidentally, over the last few months I’ve been working with a Minneapolis-based group called Nexstar, that helps home service providers--electricians, plumbers, heating and air conditioning contractors--manage their businesses. Their members are financially successful local companies, often with multiple locations.
One problem they share, however, is this: where is the next generation of their employees coming from?
Being a plumber or electrician is not a sexy job for kids growing up in a world of high tech billionaires. Yet these are jobs that can support a solid middle-class lifestyle. As one electrical contractor told me: “I watch some of my kids’ friends go to college, graduate, and come back to live with their parents. By then, a guy who goes to work for me has bought a house, is getting married and thinking about having children.”
My advice to these companies was that they need to tell a new story about jobs in the trades--not just to potential employees, but to teachers, school board officials and parents. The story has three parts:
--These are jobs that can’t be outsourced or automated. No matter how much Internet bandwidth you have, you’ll never be able to hire someone in Bangalore to change your kitchen faucets. And high on the list of jobs that can’t be done by robots involve physical dexterity in small spaces and flexible problem solving.
--These are jobs that, increasingly, use high technology like smart smart sensors and automated systems to control both electricity and plumbing. Home contractors are right at the interface between the physical world and the “Internet of things.”
--Finally, these are jobs that will help save the planet. We’re on our way to 9 billion humans by the middle of the century, many with middle-class lifestyles that will increasingly tax both our energy and water resources. By the Twenties, energy and water conservation will become major concerns--and an increasing part of electrical and plumbing and HVAC work.
In the United States educational system high schools measure their success by how many graduates go on to higher education. Yet many of those students fail to complete their degrees. And even if they do, four years of college may not give students much more than a lot of debt and a job at Starbucks. Maybe it’s time for policy-makers to broaden the definition of “a good job” beyond the confines of the office cubicle.
Regular readers know that my favorite form of communication is public speaking, and I'm occasionally asked where people might be able to see me. Alas, almost all of my engagements are private, so I usually don't have a good answer. But this spring and summer I have a few public speeches, and I'll mention the first of them today.
BlueWater Technologies is a Michigan-based company that specializes in high-end audio and video technology for installations and meetings. They're also known for an annual full-day event in Detroit called TechExpo that showcases the latest in AV tech and related gadgetry along with educational sessions (and meals, and entertainment). This year's TechExpo is May 21st at The Fillmore - Detroit. And they're currently offering tickets at half-price, so that makes it an even better deal.
Recently, between speeches, I’ve been restoring an old stone farmhouse in Sicily. In many ways Sicily is a step back in time (a great tonic for a futurist); it’s also often a reminder of how life works in a culture where the virtual world is still just gaining a foothold.
One morning in Sicily I needed to order a bathtub. I was buying from the same store where I’d initially seen the tub, they had sold me lots of other plumbing fixtures and already had all my financial information on file. All I wanted to do was place the order.
In New York City we would have done this by email. In Sicily, however, there was another visit, coffee, nice conversation, the careful writing of the invoice by hand, a bit more conversation, then “Ciao”. (Later I would receive, by email, an electronic version of the order; it had been entered into the computer after I left.)
On the same trip I asked the kitchen designer if he could email me PDFs of the final shop drawings. Instead he set up an appointment. A coffee, nice conversation, a careful and leisurely review of the shop drawings, some additional conversation, and only then—a copy of the shop drawings.
Efficient? Certainly not. But once I let go of my American timeframe, it was pleasant and enriching. Somehow it reminded me of a morning, years ago, in Senegal, when I watched a street merchant selling kola nuts, the caffeine-rich berries that are West Africa’s morning cup of coffee. Each customer would stand, perusing the tray of nuts, a conversation would begin and after a few minutes, the deal would be done. Finally I went up and bought my own kola nut. It cost something like one-sixth of a cent—an amount that to my American mind seemed radically out of scale with the amount of time each customer took to purchase.
Of course, in both Sicily and Senegal, the point wasn’t simply the transaction, but the social event as well.
For years I’ve told retailers that their virtual stores must duplicate the social environment of their physical stores; when I go into a virtual store I need to be able to look around and see if any of my friends are shopping there also.
That’s the element that “social shopping” startups are restoring to the world of e-commerce. Sites ranging from Polyvore to Pinterest let friends and family make suggestions and comment on your shopping, mimicking the social event of a group visit to the mall. And they’re driving a lot of purchases.
But what Sicily reminded me was that there is another social element retailers need to integrate: the relationship between the seller and the customer. Sure, sometimes you’d rather just make the order and get out. But other times, a salesperson who really knows their product is a great pleasure. Beyond simple information, there is also a very old and traditional social exchange that can enrich both customer and salesperson.
Some might suggest that Americans no longer value that kind of exchange, but I suspect they’re wrong. It’s something we need to duplicate in the virtual world, in some way that’s more tangible and social than pop-up instant messaging boxes. And perhaps more importantly, that salesperson-customer relationship, properly managed, will continue to be a strong advantage for the brick-and-mortar world.
Lately I’ve had a number of requests for my speech “How to Use the Downturn to Rethink and Thrive”, which demonstrates a couple of things. First: the economy still isn’t out of the woods (no surprise). And second: more and more organizations realize that the past five years have seen fundamental shifts in business and society that will hinder their recovery even when better times return.
Thus there’s a new openness among executives to learning about future tools and techniques. But then there’s usually also a question: how do we sell these new ways of working to our managers and staff? Just this month I’ve heard versions of that question from school administrators in the Midwest, convenience store operators in Atlanta and a major insurance brokerage in California.
My answer? Consider our bodies’ immune system. It’s a wonder of nature: a team of various agents, from macrophage to T-cells, highly evolved to attack bacteria, viruses, allergens, anything that looks like a foreign invader.
And just like the body, organizations have also developed immune systems--but these systems attack outside ideas. Long ago, that was probably generally a good thing. Business moved slowly, the world didn’t change much, and most new ideas were probably just going to waste time and money.
But now. too often, the corporate immune system attacks good ideas. Like the body’s immune system, there can be multiple agents in the corporate immune system. Sometimes it might be the lawyers. Corporate lawyers don’t usually get fired for saying “no.” In fact I once worked with one for whom I prefaced every idea with the plea “Please don’t say no until I finish talking.”
Or, more surprisingly, it can be the sales staff. Salespeople like to know their product, so they appreciate New and Improved! But they don’t necessarily like Altogether New. (Years ago the newspaper business learned that when they trained their print sales people to also sell online ads. But the print people were never fully comfortable with the online lingo--and thus online ads never seemed to come up in the sales calls.)
In fact, immune agents can be any job-title in your business, up to and including the board of directors. As a result, when you encounter resistance to new ideas, you first need to identify which part of the corporate immune system has switched on. Next—and here’s the hard part for true innovators--you need to make your new idea look as much as possible like something that’s already being done. And then, with some gentle urging, you can get that new idea past the corporate immune system and into practice.
Earlier this week I had an interesting question from a group of executives in central Pennsylvania. We were discussing the implications what I call “the virtualization of America” and how much of our lives and work will take place in cyberspace by the end of the decade.
During the conversation one of the executives, in her mid-thirties, said that for a variety of reasons—privacy, human contact, security—she really wasn’t that comfortable with social networks and email and all of the other digital accoutrements steadily consuming our lives. She acknowledged that she was in the minority, but suggested that there will always be people who simply don’t want to engage with the virtual world. What, she wanted to know, are those people going to do? In the future, will you be able to have a life without the Internet?
Coincidentally, there’s also been quite a bit of chatter lately among the digerati on a similar theme. Dave Roberts, a popular blogger at the environmental site Grist, had announced that he was leaving the cybersphere, cold turkey, for a year—no blogging, no email, no tweets. He was burned out on virtuality.
At the same time the author of the influential legal blog Groklaw announced that she was shutting down her blog since, given recent revelations about US government surveillance, she could no longer offer her email correspondents and sources any hope of anonymity.
The desire to get “off the grid” is of course not new. In decades past, that meant detaching from civilization—generate your own power, grow your own food, dig wells, join the barter economy, etc. Just about every generation has a group that decides civilization is soon to end for one reason or another—Peak Oil, social collapse, the Year 2000—and heads for the hills. Some percentage decide after five or ten years that it’s hard work out in the wilderness, the apocalypse may not be quite so imminent and so they return to the world of pavement and petroleum.
Getting off the “virtual grid”, however, may be much more demanding. By the end of the decade, while it will still be possible to eschew all forms of electronic communication, it’s going to harder and harder to move through society without involving some chips and data. Everything from car and parking places to your electric meter and dishwasher will be connected to the Internet. Web-connected video cameras, perhaps running facial recognition software, will be everywhere. Already, even small businesses can hook up their existing video security systems to a cloud-based system that automatically reports customer demographics and movements. All I could tell the young manager in my meeting was that getting off the virtual grid will probably require even effort than in the past. Head for the hills or the desert, give up on the money economy, become entirely self-sufficient in food and energy, detach entirely from news of the outside world…
And then make sure that your new high-tech solar panels aren’t actually Web-enabled.
I was doing an interview this morning about the movie “Back to the Future II” and its predictions about 2015. There were some hits and some misses in that 1989 movie--and you’ll undoubtedly hear more about that as 2015 approaches. But perhaps the most glaring miss was the appearance of a phone booth as part of the 2015 plot.
Good question, and one I had already considered—because I’d published a near-future science fiction novel called Forbidden Sequence back in 1987, and I’d pretty much missed cellphones as well. Yet they’d been around since 1983, and Michael Douglas’ Gordon Gekko made them talismanic in the 1987 movie “Wall Street”.
So by 1989, the trend was unmistakeable. My most prized possession at the time was a Motorola MicroTAC phone--the first portable phone that wasn’t the size and shape of a man’s shoe. Well, it wasn’t exactly my possession. It cost about $3000--over $5000 in today’s dollars--and was on loan from Motorola since I was the technology writer for Newsweek. The mobile phone I could actually afford in 1989 was mounted in the armrest of my car and had a shoe-box sized transmitter in the trunk.
So I should have had cellphones on my horizon in 1987, and, Hollywood being Hollywood, the writers of Back to the Future II probably actually owned them in 1989. I suspect the reason we repressed mobile phones is that they really change narrative. Much of traditional dramatic plotting back then revolved around one character knowing something crucial and trying desperately to inform the others.
At that moment in history, introducing mobile phones to the storyline would have made plotting much more difficult. Within a few years, of course, mobile devices began to appear in stories and films and now constant and ubiquitous communication is the basic assumption.
And younger writers learn to use mobile devices as plot devices in themselves--see the final episode of season two of HBO’s “Girls”, where the entire soap opera finale with Hannah and Adam is dramatized through FaceTime.
It’s a great moment when Hannah accidentally turns on FaceTime and realizes that Adam has an iPhone. Even in the middle of an enormous emotional crisis, she blurts: “You have an iPhone?!” It’s an accurate reflection of how devices, increasingly, define us. As is always the case, technology may have taken away one kind of plotting trick but has given us plenty of new alternatives.
Several hundred fast food workers have walked off their jobs at McDonalds, Burger Kings, Taco Bells, et al in New York City, where most earn the minimum wage of $7.25 an hour.
At the moment the media seems to be treating the walk-out as more of a novelty than anything else—the Times is reporting it on their City Room blog. Commenters around the Web are fairly universal in saying that challenging the fast-food giants isn’t going to work.
I’d suggest, though, that this could be a distant early signal of a labor trend that we may see increasingly as the decade goes on—indeed, a labor trend that may be necessary just to keep the American economy working.
More and more of the new jobs we’re seeing in this recovery are service jobs. In larger cities, college grads compete with each other to land jobs folding shirts at J. Crew or steaming milk at Starbucks. Blue collar jobs are already being automated or outsourced, and low- and mid-level white collar jobs are next. In the long run, the functions that can’t be moved into cyberspace involve actually giving customers physical goods or providing hands-on services, like home health care attendants.
These are the jobs that will still be here in 2020. These are also, however, jobs that rarely produce either a living wage or a career path. In a sense they are like the factory jobs of the early 20th century, before unions and the American labor movement.
I’m acutely aware of all the optimistic arguments that say as old jobs are automated, new jobs appear—new jobs with higher wages that require more intellect, jobs that machines can’t do. But I’m not sure that’s always going to be true as we begin to automate more and more white-collar positions and put intelligent robots to work.
It’s generally assumed on both sides of the political aisle that a healthy, thriving middle class is crucial to the American economy. But that’s not how the future is shaping up.
So we may have a choice: do we increase the wages of service workers, as we did with factory workers a century ago, and give them a path into the middle class? Or do we increasingly redistribute income via the government through measures like the earned income tax credit?
I think the first option—raising service industry wages—is a healthier alternative than a permanently shrinking middle class. But that will require employers to go along, and that’s not going to happen without things like fast food strikes.
On the other hand, it may already be too late for that. Behind the scenes even fast food automation is moving ahead quickly. By 2020 you may be ordering on an iPad and picking up your meal from a conveyor belt, with few low-wage service workers in sight.
I’ve been on the road this week speaking to some fairly traditional groups--lawyers, insurance executives--and I’m getting questions about Marissa Mayer’s dictum that canceled work-from-home arrangements for Yahoo workers:
“Listen, if a Silicon Valley outfit can’t make it work, then maybe this telecommuting thing just isn’t such a good idea.”
First, I explain that the Yahoo situation isn’t typical. Mayer inherited a company that, having lacked direction for years, probably doesn’t even know what all its people are doing in the first place. Temporarily herding them all into the office is likely a good way to sort it out. (Not to mention that new mother Mayer built a nursery next to her office, so the work-at-home issue is moot for her.)
But then I emphasize that telecommuting itself is here to stay, and will grow only more important. We tend to forget that the US is still the fastest-growing developed nation on earth--now over 300 million, on our way to 400 million sometime in the early Forties. If you think it’s crowded out there now, just wait. Traffic congestion already adds one entire work week of sitting in the car to the average worker’s life each year, and that number keeps going up.
It’s going to be increasingly difficult to explain to young office workers why they have to get in the car and commute every day in order to sit in a cubicle and send emails and IM and do videoconferences. That will become even more of an issue for employers later in this decade as baby boomers finally retire and the competition for talented millennials really heats up.
Sure, there will always be good reasons for people to meet in person, although those occasions may diminish as telepresence systems get ever more “real” and the next generation of workers brings a new comfort with virtual work. But the need to meet in person every once in a while doesn’t mean that you have to move your entire workforce into the office every day.
The trend is utterly inevitable. And perhaps fifty years from now there will even be an online trivia competition in which one of the questions is:
“What was a rush hour?”
Give away what you used to sell, and sell what you used to give away.
It sounds like a zen parable, but it’s also something that more of my clients are pondering, as their business models move into the cybersphere.
My career started at Rolling Stone, so I naturally think of the music industry as an example. Years ago, if you were a rock and roll band, the way you made money was simple: you recorded an LP or CD, and when it was released, you went on tour to promote it.
You needed as much exposure as possible, so ticket prices were low and tours often didn’t make much money. You nearly gave the t-shirts away, because when you left Philadelphia you wanted to make sure that every kid in town had Led Zeppelin Summer 1976 displayed on their backs. Where you made your money was album sales, and everything else was marketing toward that end.
Now, for reasons ranging from online piracy to lower royalties for streaming services like Spotify, the value of recorded music has dropped precipitously. So some bands actually give away their music and instead make money on tours and selling merchandise (like those t-shirts). Baby boomers who haven’t been to a rock concert in a while are often stunned by $200 ticket prices and wonder: when did that start? Well, it started when it became clear that nobody was ever again going to get rich on CDs.
Something similar happened in journalism: in the early days of the Internet we found it impossible to charge for online news--but people were happy to pay $4 or $5 for a single article from the archives. Fresh news, it seemed, was supposed to be free, but once it was a few days old it was information and readers were willing to pay for it. (Explaining that to a grizzled old newspaper editor was a real challenge.) While more newspapers are now finally charging for news, some still use a business model wherein today’s news is free but you have to be a subscriber to see anything older than 24 hours.
Where else does this happen? One client used to make excellent money as a clearing house for government environmental records that were otherwise hard to access. But they recognized that sooner or later those records would be easily accessible online, so they turned their free Website into a for-pay community for environmental professionals. Lawyers, also, are increasingly mulling a future in which basic legal services may be either automated or out-sourced--so perhaps the real value they offer is the advice they give away for free during those client lunches and dinners. Lately I’ve even heard of corporate travel agencies who earn bonuses for NOT booking travel for employees but instead talking them into using telepresence.
Clearly one size doesn’t fit all--but it’s an interesting question for almost every intellectual property or services company to consider: Give away what you used to sell, and sell what you used to give away.
No matter what my speaking topic, the Q&A portion often turns into a discussion of Millennial behavior, either from the perspective of parents or employers. Did our parents spend this much time at professional meetings talking about us? Perhaps--but I also think that we're seeing not only traditional generational tut-tutting about the youngsters' strengths and shortcomings, but also a deeper kind of bewilderment about the impact of virtual communication and relationships.
Last week, at a major international consulting firm, I heard a story from the head of internships that combines two dominant themes.
This particular company runs an extensive multi-year internship program that begins with undergraduates. The selection process is so demanding that when a student lands an internship, she can be pretty sure that she's going to get a job after graduation.
In this case, the interns were invited to a weekend field trip in a large Eastern city, mixing with some of the company's higher-ranking officers. At one point, the whole group went from one venue to another via bus. One young woman found herself sitting next to the company's CFO on the bus. And she proceeded to spend the entire ride texting on her mobile phone.
Afterwards, the CFO went to the internship coordinator and said he was sorry, but someone who can't make small talk on a short bus ride just isn't going to work out at the firm.
At the end of the day the internship coordinator took the young woman aside and said that, regretfully, they were going to have to remove her from the program. And then the coordinator just had to ask: "What were you thinking? Sitting next to a senior offficer of the company and spending all your time texting?"
"I was texting my father," the girl explained. "To ask him what you should say to a CFO."