Thursday, November 15, 2012

The economy may become increasingly jobless, but there will be plenty of Work.

Job Roles

Many recently lost jobs may never come back. Rather than worry about unemployment, however, tomorrow’s workers will focus on developing a variety of skills that could keep them working productively and continuously, whether they have jobs or not. It’ll be about finding out what other people need done, and doing it, suggests financial advisor James H. Lee.
Jobs are disappearing, but there's still a future for work. An investment manager looks at how automation and information technology are changing the economic landscape and forcing workers to forge new career paths beyond outdated ideas about permanent employment.

Futurists have long been following the impacts of automation on jobs - not just in manufacturing, but also increasingly in white-collar work. Those in financial services, for example, are being lost to software algorithms, and intelligent computers.*

Terms used for this phenomenon include "off-peopling" and "othersourcing." As Jared Weiner of Weiner, Edrich, Brown recently observed, "Those jobs are not going to return - they can be done more efficiently and error-free by intelligent software."

In the investment business (in which I work), we are seeing the replacement of financial analysts with quantitative analytic systems, and floor traders with trading algorithms. Mutual funds and traditional portfolio managers now compete against ETFs (exchange-traded funds), many of which offer completely automated strategies.

Industries that undergo this transformation don't disappear, but the number of jobs that they support changes drastically. Consider the business of farming, which employed half the population in the early 1900s but now provides just 3% of all jobs. The United States is still a huge exporter of food; it is simply a far more efficient food producer now in terms of total output per farm worker.

In an ideal world, jobs would be plentiful, competitive, and pay well. Most job opportunities have two of these qualities but not all three. Medicine, law, and finance are jobs that are both competitive and pay well. Retail, hospitality, and personal services are competitive but pay low wages. Unions often ensure that jobs pay well and are plentiful, only to later find that those jobs and related industries are no longer competitive.

Since 1970, manufacturing jobs as a percentage of total employment have declined from a quarter of payrolls to less than 10%. Some of this decline is from outsourcing, some is a result of othersourcing. Those looking for a rebound in manufacturing jobs will likely be disappointed. These jobs will probably not be replaced - not in the United States and possibly not overseas, either.

This is all a part of the transition toward a postindustrial economy.

Jeff Dachis, Internet consulting legend and founder of Razorfish, coined the phrase "everything that can be digital, will be." To the extent that the world becomes more digital, it will also become more global. To the extent that the economy remains physical, business may become more local.

The question is, what is the future of work, and what can we do about it? Here are some ideas. {Read on}