Our world is being remade, and at a speed unprecedented in history. Nowhere is this more apparent than in the way we work. Not only the jobs that we do, but the way in which we do them, will have been transformed within a single generation.
In a bid to understand these changes and their implications, seven years ago I founded the Future of Work Consortium involving about 50 corporations around the world. We meet frequently to discuss the set of forces that are reshaping the world of work, and how governments, companies and individuals should respond.
The first and most significant change is technology and the speed and ease of connectivity, which is having a profound impact on where and how people are working. There are positives, but also significant challenges. There have been predictions that as many as 40 per cent of current jobs will be lost, mainly in the middle skill portion of the jobs market.
Second, there are the significant demographic changes as people’s lifetimes increase.
People born today can expect to live for 100 years or more, which will lead to a fundamental reconstruction of life.
Third, and also important, are the changes in the ways that societies behave, in particular the breakdown of trust between the majorities and the elites or expert classes.
Each of these has implications for who wins and who loses, and therefore ultimately for the stability of societies in general. Technology, for example, appears to be increasing inequality. As the World Bank data show, the winners have been the global rich and the middle classes in the emerging countries such as India and China, and the losers have been the global poor and the middle classes in developed countries in Europe and the US. Much of the data on what is called the ‘hollowing out of work’ show that the major loss will be in middle and low-level jobs while higher skilled jobs will survive.
This is significant because even if societies are rich enough to look after people who don’t have jobs, most people don’t want to be ‘liberated’ from the world of work – they enjoy their job and it helps give significance to their lives. So if they lose their jobs in the future because, for example, driverless cars have been developed, they will lead poorer lives as a result. The data on unemployment demonstrate that when you don’t have a job, your skills, your social networks and your personal identity all atrophy.
As people live longer lives there is also an increasing risk of inequality. The rich not only live longer, because they can afford better healthcare, but are able to save sufficient money to retire while still relatively healthy. Those people in the middle of the income scale, who might have been able to retire relatively comfortably a few years ago, can now expect to continue working for much longer. Right now, those on lower incomes live on average 12 years less than the rich – so they face the awful prospect of having to work longer and then having only a very limited period of retirement. This is a profound challenge that government policy will have to address over the coming decades.
It is not all doom and gloom. Living for 100 years is a huge opportunity for mankind. But it would be a mistake not to acknowledge the potential dark side, and to recognise that corporations and governments are far from being prepared for the scale of the changes and the transformations they will face. Across the world there are some governments that are showing the way in different areas.
The Ministry of Manpower in Singapore is a good example; in fact, they funded my initial thinking on the future of work seven years ago. Over the years a very strong reciprocal relationship has been built between corporations, the government and education, and this multi-stakeholder group has been able to address some of these challenges – but of course it takes a very strong handed civil service and highly talented ministers to create this reciprocal relationship.
Another country that we could learn much from is Japan, which has an ageing population and has focused on both technology – for example with the development of robotics in elderly care – and on fiscal policies, for example giving tax breaks to those families with four generations living in them. The flexible working practices in Scandinavian nations, such as Norway and Denmark, point the way to how working lives can become more adaptable.
No government, however, has entirely cracked how to respond to all these changes, in particular in the education sector. When people live longer lives, and at a time of profound technological change, then their skills become rapidly outdated. So the focus is on continuing to learn right through the lifecycle. At the moment neither government policy nor educational institutions are set up to deliver this.
There is also a challenge for companies. The way most firms think about talent is often incredibly traditional and old fashioned. Take, for example, the expectation that the most talented people will want to work for a company full time and on a salary.
The reality is that increasing numbers want to build their own business or brand and then sell their IP rather than going through hours of work.
There will also be a struggle with day-to-day flexibility. Working from nine to six might be acceptable if you are going to stop working at 55 or 60, but what happens when you want to work into your 70s and are a member of a dual career partnership? There is no doubt that the level of relentlessness that creates is going to deplete your intangible assets over time – your productivity, your family life, your friendships and your health. Organisations will have to be far more flexible.
It’s not just work that is going to have to evolve to cope with our changing world. Our personal relationships will be impacted too. In our classes we ask our MBA students to describe the sort of relationships they see themselves having in the future. There is a great deal of diversity in their response. Some say that it’s very important to them to find the right person and live together until they’re a hundred years old, so they’re going to go through a careful process of choice.
Others expect to have different kinds of partners at different stages in their life. There is no doubt that traditional relationship structures will change. Right now, young people are putting off getting married, and for those who are married, the highest divorce rate is among the over 60s. Without a doubt a more dynamic marketplace for marriage and jobs will emerge and the dividing line between work and home will become increasingly fluid.
All this has significant implications for the ways that companies are managed and led, and there are three areas in particular where firms need to behave differently.
Firstly, organisations and leaders must build a much stronger capability in foresight and the capacity to think about the long term. This has been crucial for corporations. For example, at Unilever it has resulted in CEO Paul Polman becoming very involved in climate change and a broader array of resource issues.
Next, it is clear that the world is going through an era of enormous transformation to which businesses will have to adapt. I chaired the World Economic Forum Council on the Future of Leadership a couple of years ago. One of our major insights was that business leaders have a key role in building a narrative about the future that people find compelling and want to walk towards.
There is no doubt that in these times of flux that’s a very difficult thing to do. Some leaders work by creating a narrative of fear that people want to run away from. This might work in the short term, but it’s never the right way to prepare for the future. These narratives have to be future orientated, positive and honest.
Finally, getting ready for the future requires trust, which is in short supply globally at the moment. In the past, I believed that a breakdown in trust between businesses and society wasn’t a fundamental problem, and could be fixed by greater transparency and honesty on the part of the corporations. More recently, I have become concerned that the global public has lost trust in experts and data of all kinds. I believe this is a shift in the wrong direction. It seems to me that in a functioning democracy the provision of truthful information by non-partisan experts is crucial to helping people make informed decisions. The role of experts is incredibly important in society and I wouldn’t wish to see that undermined by this wholesale collapse in trust.
I believe that humanity has a bright and interesting future, in which we will live longer and richer lives, aided by technology.
But first we need to navigate the coming years of transition, and to do that we need great leaders who can persuade us to adapt to this brave new world.