The global challenge of work is two-fold. First, will automation, in its various forms, destroy jobs? And second, even if not, will workers be paid enough to sustain the global economic system? This is why the former US Treasury Secretary Larry Summers has said the problem of “good jobs” is the central problem of the richer economies.

The combination of economic stagnation, global competition and digital technology has created something of a social and public panic about work. We are losing “the race against the machine,” or reaching “the end of labor”. But there are two diverging stories about the future of work, one dystopian, one utopian, as Flipchart Rick has observed. On the one hand: it “will revolutionise the workplace … and enable us to have more fulfilled working lives.” And on the other: a future “of factories without people, of vanishing jobs, of a hollowed out labour market and … vast profits with few employees.”

Our present model of work is, broadly, a creature of the industrial revolution, dominated by the division of labour, the supervision of labour, and payment of workers for their time or their tasks. This includes so-called “new economy” models such as Uber, whose casualisation of its workforce would be recognised by any 19th or 20th century dock-worker. Some of the big shifts shaping work reinforce this model. Others are starting to reshape it, potentially marking the start of a transition beyond it.

To understand how this is likely to change over the next decade and beyond, we need to understand the global landscape of work. These are a shift towards services, the globalisation of supply chains, the growth of ubiquitous technology, an increased squeeze on resources, and a shift in social values towards well-being. These pull in different directions.

Globalisation and digitisation take you towards rawer forms of capitalism, whereas resources and values take you towards more inclusive versions. The way you deliver services depends on which model of these two that you prefer. The version of the story about the future of work you subscribe to tends to depend on your assumptions about how these drivers will play out.

The shift to services: The deep shift in the global economy is in the long-term rise of services to “become the dominant economic activity” (UNIDO, 2009). The economists Timmer and Akkus (2008) describe this as a “powerful historical pathway of structural transformation,” which every country follows.

One of the reasons for the long boom in living standards in the 20th century was because of the long boom in manufacturing, the dominant economic trend for much of the century. Productivity growth and economic growth tends to fall as services become dominant, and the influence of trades unions, which are effective in maintaining the value of wages, tends to decline.

The globalisation of the supply chain: Manufacturing is also tradable, meaning that it is open to export competition. The growth of the Asian economies, in particular China, has been extensively driven by manufacturing. Taking a long view, Asia’s share of world production almost doubled between 1970 to 2008, from 15.5% to 28.5%, at the expense of Europe and North America. (Unido, 2009). This growth was driven largely by the development of containerisation, not digital technology, because it transformed shipping costs.

But globalisation is reaching its limits. Wages in export sectors in both China and India are now relatively high (a pattern seen in other emerging economies in the past) and companies are moving their production closer to their markets, both anticipating rising transport costs and wanting to be able to respond more flexibly to demand.

The other effect of globalisation, of course, is an increase in migration: more than 500 million people globally now live in a country they weren’t born in. Economists generally agree that immigration is good for economies. Migrants tend to be younger, more enterprising, and economically active, and their effect on wages, economic growth and tax contributions is almost completely positive. However, in weak labour markets migration also tends to push down unskilled wages by increasing competition for such jobs; such competition is gamed by unscrupulous employers.

The growth of ubiquitous technology: There is a widespread fear that the rise of robots – or more exactly, a combination of computing power, algorithms and robotics – will destroy the labour market, even, possibly, the very idea of labour value. A widely publicised study by Oxford University academics Carl Benedikt Frey and Michael Osborne argued that for the United States jobs are at high risk of being automated in 47% of the conventional occupational classifications (Frey and Osborne, 2013). In The Second Machine Age, Erik Brynjolfsson and Andy McAfee suggest a reason: that computing power is capable of exponential growth in performance over time, and that we’re just at the start of that progression. If robotics did for blue-collar work, then artificial intelligence will do for white collar work.

This argument, however, tends to miss the fact that technological innovation, historically, has created new jobs, typically after a period of turbulent transition. In his analysis of the labour market, David Autor (2014) finds that between 1999 and 2007 “routine task-intensive” jobs were indeed largely removed by computerisation, while knowledge jobs (“abstract task-intensive”) tended to survive or increase where human knowledge was complemented by computers. “Manual task-intensive” jobs, at the less-skilled end of the market, were much less affected by computerisation, and demand for them seemed to be rising. Yet their wages fell. His explanation: labour supply for these jobs increased because of the collapse in demand for “routine task-intensive” jobs.

The squeeze on resources: Population and consumption pressures mean that we are breaching many of the natural planetary boundaries. For capitalism this is a new game: traditionally it has been able to use resources without worrying much about the consequences. And after a century of cheap energy, the long-run trend is up, despite the current downward blip in the oil price. In our recent Futures Company report The 21st Century Business, Jules Peck and I argue that this resource shift is changing the way that companies behave; we are moving to post-sustainability (socially, economically, and environmentally). An important element is a shift from consumers to citizens, among both customers and employees, where the overall impact of a business matters. An example: it’s argued that one of the reasons why McDonald’s sales are slumping among Millennials is that eating there is depressing, because of “the feeling that the people behind the counter, flipping burgers and taking orders, have dead-end jobs where they’re treated poorly.”

The shift to wellbeing: One of the long trends is a trend towards wellbeing, physical and psychological, individual and social. This complements one of the strong workplace trends: that significant competitive performance is typically produced only by empowered and engaged employees, who are intrinsically motivated to work for the business. This is true of lower-wage environments as well as higher-wage businesses.

Striking research by Zeynep Ton (2014) has found that companies such as Costco in the United States and Mercadona in Spain out-perform their sectors – by some margin – through a combination of better wages, significant investment in training, and appropriate technological investment to support staff. With such a “good jobs” strategy, increases in wages translate directly into far larger sales increases. High value work benefits individuals, businesses, as well as society as a whole.

  • John J Sills

    I think this is one of the most interesting topics to look at over the next few years. Not only is the future of work going to be impacted by digital technologies, but also a whole generation who have grown up in a staled economy, seeing the problems that working only for money has caused…and that’s before robots appear on the horizon!

    As more people look to find meaning in their work and have more experiences in life, it would suggest that less and less people will be tied to the same organisation. And, as more people decide to live their own lives rather than sticking to a set path dictated by their parents, they’ll expect to work from anywhere at anytime, and not be tied to a physical office space. That comes with it’s own challenges too – loneliness, concentration, building a real team spirit, and there doesn’t seem to be one clear answer emerging at present.

    Here’s three interesting things:

    The hidden costs of a flexible job –

    The commoditisation of the workplace –

    The future of Human Resources –

    John (@johnJsills)

    • Patrick

      Hi John, Wonderful comments all, thank you. Thanks too for the links. One thing that I find fascinating is that yes, you’ve given us a good steer and solid guidance for dealng with the online thinkers of the X & Y gens, but of course I’m told that we now have 4 generations in the workplace at once. So how is that companies can dutifully build conditions that serve X (Reactives) & Y (Civic) but also Boomers (Idealists) and the Silent Generation (Adaptives)? What would that workplace look like?

  • Patrick

    This article by James Bessen (Lecturer in Law at the Boston University
    School of Law) talks of how innovative technology is displacing workers to new jobs rather than replacing them entirely. Strong suggestions of ‘Learning by Doing’ as well –

  • Mark Catchlove

    I thought I would share of the future thinking from Herman Miller – here are 2 versions of the same presentation
    Here is a blog about the work
    You might find some audio clips on this page of interest as well

  • Mark Catchlove

    This is from my blog

    One of Herman Miller’s most recent pieces of research is entitled ‘Scenarios 2018’. Scenario planning is something that we often do in our private lives, where we imagine a series of ‘what ifs’ and create scenarios in our minds of what might be. Whether it is about education, or work or living, these decisions are often accompanied by us working through narratives in our mind.
    Scenario planning is a valuable tool for anyone in business to prepare and plan for what the future might hold. It helps us all to step back and think about external factors that could have an influence on our sphere of work, and this is no different for those in the workplace arena.

    It is also important that Scenario Planning is done with external input. Herman Miller heard views from anthropologists, economists and designers. You can hear what they shared with us here.

    As a result of this extensive work, 3 scenarios were imagined – they were
    Datasphere – New Normal – Polarised World

    The next step was to run workshops, both internal and external to establish what this means for the world of work. Whilst this is more art than science, it is a way to establish some of the key things that those involved in workplace should be thinking about and maybe even prepare for.

    To quote my colleague, Maryln Walton: “Scenario planning really helps you perceive things differently—it opens up your mind to new ideas. We start asking different questions, challenge our thinking, challenge the team’s thinking. That’s what’s really important.”

    • Patrick

      Hi Mark, Great stuff. Thank you. Given that we are discussing scenario planning under the topic of ‘Future of Work’, I thought I’d mention scenario planning at a personal level.

      A friend of mine noticed that while she regularly worked with client organisations using foresight, the individuals themselves weren’t necessarily applying the same skills to their private lives. It was an interesting insight and the result was that she wrote this book – Futurescaping: Using Business Insight to Plan Your Life.

      Strikes me that this could be relevant going forward because while the tools and practices of foresight are still relatively nascent as an industry, people will become more aware of them in the future and their usage might indeed increase.

  • Mark Catchlove