Abstract:
In this brief presentation we look at the driving forces for the nature of jobs and careers in the first two decades of the 21st Century. After this brief preview, we look at the impact of COVID 19 pandemic and how it is likely to leave its imprint. The net result we believe will be a further narrowing of good paying jobs for the few highly skilled and motivated workers to deliver value through new solutions to their employers, customers and / or investors. This will further force the emphasis on the System Thinking and Transformational Skills, to obtain and retain the limited number of high paying jobs in return for high value addition. For the rest – the large majority of the work force – progressive social and economic policies may be needed such as higher minimum wages, better and readily accessible health care, housing and education, early childhood care, etc.
Pre COVID 21st Century Economy:
If we look at the labor population as the number of workers engaged by employers we find them with a range of skills to do their jobs. We find an exponentially decaying curve on an average, with few people with very high skills and increasingly larger number of workers with lower skill levels. As a general rule higher skills are acquired through higher levels of education. These higher skilled workers are also paid higher wages for their outputs. This averaged exponential decay curve also created the rich, large body of middle class and low wage earning labor pool.
Since the early 1970s the advent of Digital Technology started permeating the way we live, work, shop, consume resources of all kind, etc. The role of DT included collection and processing of data and information, wireless communication, worldwide supply chain, IT automation, de-skilling, off shoring, outsourcing, gig work, …… One could use these same tools and resources for integrating knowledge to create new skills and outcomes not conceived before. The combined effect of all these can be grouped into two categories:
NEW SOLUTIONS: that are created through integrating knowledge from across the globe leading to outcomes of higher value and higher skill levels. These require high value addition workers such as at Google, Apple, Space X, Amazon AWS and at all the startup companies as well as innovation and new business teams operating within every company.
REPLICATION SOLUTIONS: that are mere re-production of what is already known cheaper, faster, better and increasingly larger quantities. These are the low skill and low wage jobs at Walmart, McDonald, fulfillment centers of Amazon, meat processing plants, farm workers, workers at the mines, workers in the service sectors, minimum wage workers in the health care, etc.
The net result of these two modes of employment and work outcomes has been to distort the curve for skills required and the wage earned as a result. We now see an L – shape or Binary Economy with a steep line with rewards increasing sharply with more skills for a narrow set of work and workers and a shallow or flat segment where the skill required for a large number of jobs is relatively small and constant. This Binary Economy which evolved in the end of the 20th century has taken its deep foot hold for the past two decades at the beginning of this 21st century.
For details on the Binary Economy please see: https://books.google.com/books/about/Thriving_in_the_21st_Century.html?id=pblemwEACAAJ&source=kp_cover
Before we look at the impact of COVID 19, we need to take a closer look at the impact of the Binary Economy and its effect. They provide the basis or starting point for our further analysis of the serious impending impact of this pandemic.
The impact of the Binary Economy can be divided into two categories based on its effect on the developed economies such as the USA and emerging economies such as China, India and Brazil. The Income Vs. number of people in the work force has always been an exponential decay curve for any nation. But the rate of decay or decline vs. work force size has been more gradual for developed nations. This also sustained a larger number of people in the middle class. The developing nations with their huge population have a steeper decline in wages with few in the middle class and a large number of people living in poverty. When we superimpose the Binary Economy on top of these pre-existing economic conditions one can see the following outcomes:
Developed Nations:
- Higher labor productivity and efficiency through Digital Technology applications leading to lower direct wages ($/hr.) paid to workers. Wage stagnation.
- Most of the workers in these economies who were the middle class are pushed into Economy 2 and are suffering from downward economic pressures.
- Few investors and innovators, who participate in Economy 1 have done very well.
Developing Nations:
- Much of the middle class and some poor—most of the population in these economies -benefit from Economy 2
- Many investors and innovators, who participate in Economy 1 have done extremely well.
- Extreme poor have not seen any benefits.
The above are inevitable consequences of relentless reliance on “Replication Solutions” to produce and distribute more of what is already knows such as automobiles, transportation, fossil fuel solutions, etc. All forms of “New Solutions” have been concentrated on Digital Technology applications that have been adapted for further efficiencies in the Supply Chain, Global logistics and productivity gains in the above Replication Solutions. In other words Globalization can be thought of as a scheme where the water (knowledge and resources) from the lakes at a higher level are drained to fill the lakes at a lower level raising a few boats in it (increasing middle class in China and India). This has lowered the water level in the lakes (at the source) in higher altitude making many of the boats in it hit the rocks (Collapse of the middle class). This could be avoided only if the lakes at the higher altitude are filled with more water (such as more New Solutions for alternate energy, better climate, control of hunger and poverty through better resource management, control of pandemics, etc.) Occasional outcomes in New Solutions such as in Bio Sciences are too small and limited to have the required impact (fill the lakes in higher altitude). The outcome of this economic activity (Globalization) has been to pump some rewards to a limited few, the class of people described as “investors”.
The above impact of the Binary Economy can also be seen in the nature of available work to earn wages. It has been stratified into four layers which are increasingly impermeable.
As a broad category we can divide the impact of jobs and careers between Non-Wage income and Earned income. Non-wage income is gained through equities and dividends. They are called “Investment Income” dependent on the stock and bond markets and many other investment instruments.
Earned income is the wage gained, paid for by the employer. These are the salaries, benefits, bonus and such compensation paid to the workers.
The non-wage income and ability to acquire that from sources across the globe has substantially increased the wealth of the few at the cost of the large majority of the global population. As a result we have a few highly rich (the 1%) Vs. all others (who are modestly well off to the very poor (the 99%)
The investors look at their outcomes only in terms of the financial metrics. They do not generally have the insights or knowledge of the physical processes and methods that enable the products and their use. It is reported that over 70% of the stocks traded daily in the Wall Street are purchased and sold in less than 3 minutes. Is it realistic that these investors know anything about the ins and outs of the company they buy and sell in 3 minutes? Increasingly the top executives of most companies are also non-wage income earners focused only on the financial metrics of the company. These senior executives earn higher levels of compensation through stock options and bonus paid based on stock prices more than their salary and wages.
The wage earning population (the 99%) is now further divided between three separate layers:
The Professionals, Information workers and Physical Labor workers. It is easy to identify them as College educated workers, Call center workers and the large majority of low skilled workers at Walmart, McDonald or Amazon fulfillment centers without any college education. They are also mostly the minimum wage earners. These low skill, low wage physical labor workers do not have opportunities to migrate to the information work for two reasons: One is that they lack the basic education and proficiency in IT applications; Second the information work and physical work take place at locations distinct from each other. For example the physical labor may be employed in a factory in China or Thailand while the call center for information work may be in India or Korea. There is little room for on the job learning or cross pollination between these two sets of workers.
Now let us focus on the “Professional work”. This is the work required to conceive, develop, deploy and exploit a complete solution and get paid for it. This work requires higher education. This work also requires selected physical labor and substantial information work. These jobs require integration of knowledge and fostering high value added new solutions.
These layers of work are no longer well integrated within one organization. It requires workers to think broadly, beyond their comfort zones and ask what is the solution I am creating? What is the solution I am responsible for? – in a larger and broader context. This is the beginning of the system thinking required for jobs in 21st Century economy.
The information and physical labor work is constantly standardized, deskilled and pushed into the low wage “Replications Solutions” category. It is only those who participate in professional work and deliver a constant stream of new solutions who are also able to sustain high wage levels consistent with the value of their new solutions and their use.
Post COVID Economy:
In the post COVID world, the entire world economy has been put on hold, while the world population finds ways to survive the Pandemic. The economic consequences of this pandemic are yet to be quantified. But one thing is certain: Every sector of the economy and all categories of the workers everywhere in the world will be negatively affected for sure. This down ward pressure or the negative effect is already felt in the financial sectors. At the same time the poor who truly live from pay check to check are also devastated. This is evident through the long lines – over 10,000 cars in line each day – at the food shelters in many states across the USA.
We have already discussed the economic conditions which are represented by the Binary Economy. The wealth is also divided between the 1% ultra rich and the rest (99%). While these challenges and inequities continue, the COVID 19 has imposed a downward pressure or depression across all categories of workers.
How will the recovery after COVID 19 look like?
To answer this question we have to assume that nations across the globe and their leaders will exercise prudence and collaboration. This globalization will have to be for the betterment of all. Otherwise economic cannibalization and related policies across the globe may leave little room for meaningful predictions.
Let us assume that the Pandemic is contained in the next six months and a vaccine as well as cure is found in 18 months. These conditions provide room for meaningful recovery of the economy across the globe.
Such recovery for the rich (1%) is highly likely to be V shaped with a sharp apex at the bottom. As long as the financial markets respond to certainty of possible recovery and not the actual recovery itself (which will take a while to achieve and establish) the recovery of the financial markets might be sharp and quick.
For the 99% wage earning workers the economic pain of COVID 19 will be very intense. Their economic conditions to start with are already “L” shaped or binary as we have discussed earlier. This L shaped economy will be further depressed across the board and in all sectors of the economy.
The recovery of Individual workers and their economic plight from COVID 19 may have to be separated from the impact based on industry sector. Thanks to the need for cost reduction and higher efficiency to achieve higher profitability, the drive for further Automation, Robotics and AI Solutions may only make the L shaped economy even more acute. These will further propel a faster recovery of companies in the Digital “Technology” sector. However the hardware or brick and mortar industries will see a slow and painful recovery best described as a large “U” with a large flat at its bottom.
Nationalism and Unilateralism may also reduce the spreading of work across the globe, especially to lower wage countries. But their replacement in wealthier countries may be through automation and AI rather than through engagement of more workers and their labor. Increase in minimum wage may be the only way to address the needs of the poor in wealthier nations to limited extent.
Will the recovery be U shaped or V shaped may be the question for the companies and the industry and sectors as described above. For wage earning workers the L shaped economy will continue to dominate. Their ability to nudge into the steep line of the “L” through Transformational skills required for conceiving, developing and implementing new solutions will determine their better economic condition. Otherwise they will be pushed further into the flat segment of “L” with lower wages and diminishing growth opportunities.
Core Capabilities and their alignment – Globalization in the post COVID world:
We can identify core capabilities for any economic effort delivered through three dimensions: Professionals or workers; Collection of workers engaged in a project or activity (we shall call this as a department or function) and the enterprise or company which deploys a collection of workers and their collaborative outcomes. Each of these vectors have three core capabilities imbedded in them.
Starting from late 1970s, when the Globalization took hold all of these three dimensional core capabilities have been used leveraging every available resource from across the globe to deliver outcomes or benefits needed for anyone in the world. This unbridled inputs (use of resources) and outputs (to serve the needs of global customers) was enabled thanks to rapid developments in Digital Technology applications such as Wireless communication, Internet, networks, I phone, ……..
Along with the benefits of Globalization also came the challenges of Climate crisis, income inequality (1% Vs. 99%) and isolated layering of jobs and careers as we discussed earlier. Despite all these plus and minus have been the good news of collaboration across the countries through Trade Agreement, Accord for Climate Crisis, etc.
But in the recent few years all such collaboration are being systematically broken. Current COVID Pandemic could have been localized and managed – like Ebola crisis – but for the nationalism and unilateralism of the leaders across the globe and their hiding into their corners to find local solutions instead of working together to find a global solution addressing the needs of the humanity at large. Today countries are blaming each other for hiding the origin of the Pandemic. They are fighting with each other for PPE. Can you imagine the fighting that will occur once a vaccine is found – after all each nation would want to protect its citizens first and not the neighbors!
The point is this: The jobs and careers as well as the economy as a whole Post COVID will largely depend on enlightened leadership within each country along with collaborative leadership across the nations. The current approaches and leadership are ominously opposite to such success through mutual collaboration.
It may be better for individual workers to look out for their success based on their skills and opportunities to identify, develop and implement a stream of New Solutions. This may require greater emphasis by individual workers more than ever for emphasis and realignment of their core capabilities as individuals and as part of group or team. The core capabilities required in Post COVID economy would be the same as in the pre COVID era. However the need to pursue these core capabilities as organized set of tools through System Thinking and Transformational Skills will be far more critical and imperative in the post COVID era for the following reasons:
The opportunities for new solutions and hence demand for high skilled professionals will be limited as the enterprises struggle for their mere survival more so than growth initiatives. With the limited opportunities available the enterprises will look for higher rate of success through any new solutions for their economic justification. In other words if there were pressures in the L shaped Binary economy before, they will be even more exaggerated in the post COVID economy. This will require view of any activity, project, program or enterprise wide activity as a “Solution” not a mere collection of tasks.
System Thinking and Transformational Skills:
The solution viewed as a system involves:
- Simultaneous emphasis on breadth as well as the depth of the problem on hand or the solution required. We can call this T- shaped thinking (as it is referred to by IBM).
- This requires integrated use of the three core capabilities appropriate at every level.
- Science pertaining to any solution is the data driven analysis of the fundamentals of the problem or solution.
- Engineering is the application or use of the above data and analysis
- Management is the strategic thinking or “Why?” we are interested in the problem or solution and operational excellence or how to achieve what is needed efficiently and economically?
- We define “Technology” as the integration of the above three (Science X Engg. X Mgt.) and not merely as IT or Digital technology applications.
Three levels of System Thinking and the corresponding Transformational Skills:
Awareness:
- Develop a common language or conceive the problem on hand as a system with all the relevant contributors identified. The system is also described as the Input/Transformation/Output scheme; the output itself is clarified between Technical Output or the “What?” we need and the System Output of “Why?” is that needed?
- With the above system description of the problem or solution, we need to identify the opportunities to integrate the relevant knowledge at each level (T shaped thinking) as described in the previous figure.
This level of system thinking also coincides with the “Conceiving” of the New Solution.
Analysis:
This level of system thinking also coincides with the “Development” of the New Solution.
- This is the phase where core capabilities are rigorously integrated.
- This also relies heavily on data, analysis, analytics and validation.
- Core capabilities are not always limited to those available from a few. Instead they are readily available and accessible provided we reach out to them and incorporate them into our eco-system. This integration of resources should not be random and hence inefficient. More rigorous our effort in the Awareness level greater the clarity and specificity of the resources integrated in our eco-system. Such integration should also be based on the system outputs (Stake holder benefits) of which every eco-system partner id truly a stake holder!
Synthesis:
- The important transformational skill here is End to End Innovation. It can also be described as “Concept to realization of Commercial Impact”. This may require the system thinker to play many roles some which are assigned but some others which are necessary whether formally assigned or not.
- This flexibility required to take on many roles, integrate several eco-system partners as well as learn new skills to integrate core capabilities as needed requires a high level of emotional intelligence.
The Synthesis level of system thinking also coincides with the “Deployment or Implementation” of the New Solution.
What is Emotional Intelligence and why is this needed as a Transformational Skill?
New solutions by definition imply something new or different. They require change. Such change may be incremental or disruption on large scale. No matter what, New Solutions require acceptance by others. This implies convincing others to collaborate with us for a common goal. This ability to foster collaboration for shared and common goals is best described as “emotional intelligence”.
In this image here a new solution, something new – a black dot – stands out readily from the rest of the larger space in the white circle. Compare this in contrast to “replication solutions” or doing more of the same and in larger quantities. It is like blending a white dot in the white space, which happens readily, seamlessly and without notice.
Today a large majority of professionals carry out the job as the task assigned to them. This task oriented jobs are plenty as they pertain to Information work and Physical labor. Increasingly professionals will also fall into this trap of task oriented jobs as their work gets standardized, de-skilled, automated and laden with AI tools. To go beyond this limitation these workers have to learn to become system thinkers with a clear understanding of the Knowledge Integration and 3D Core capabilities described earlier. For these professionals the job has a goal with identifiable New Solutions to be conceived, developed and implemented. As they progress through these system skills they will become more involved in achieving and delivering “Impact” through end to end innovation. As COVID 19 has made clear to all of us we are not safe unless all of us are safe. The same goes for job success and its sustainability as well. It implies promoting and fostering eco-systems and emotional intelligence for the sustainable growth for all. This step wise and yet lifelong strategy is illustrated in the figure below.
STIMS Institute 