What will the future of work look like?
To answer this question we can look back over history. Winston Churchill said the further back you look the further forward you are likely to see. Economic studies show that over the past 200 years annual global economic growth has averaged 2%. This has meant that every generation in real terms has been better off than the previous generations. In 1950’s Robert Solow, an economics professor at Harvard and Nobel Prize winner developed the Solow-Swan exogenous growth model explaining a direct connection between economic growth and new technology innovations. According to Solow’s research, with continued technological innovation people can expect in real terms to be better off than the previous generations.
However, whilst Solow’s theory is widely accepted this no longer appears to be the situation, something has shifted. Since the 1980’s people in the middle have seen their prosperity flatline. In his 2014 ground-breaking best-seller Capital in the 21st Century, Thomas Piketty reveals some startling statistics suggesting that current generations should expect a drop in wealth over the previous generations. Several economists and entrepreneurs, amongst the Robert Gordon and Peter Thiel, the cofounder of PayPal and one of the early investors in Facebook support this thinking, believing that since the 1970’s there have been no meaningful innovations to move society forward and economic growth, prosperity and wealth has been declining. According to Piketty, if this trend continues global growth rates will average around 0.8-1.0 percent and the 21st century economy will look a lot more like the 19th century economy. Now how’s that for disruption!
“I don’t think we live in an incredibly fast technological age,” says Peter Thiel. “We have not had meaningful technological innovations since around the 1970’s,” continues Thiel whose investment fund – The Founders Fund has over a billion dollars under management. To reflect their interest in potential world changing bold innovations, the fund’s slogan takes a mischievous swipe at modern day innovations: “We wanted flying cars, instead we got 140 characters.” Thiel insists this is not a criticism of Twitter as a business. Twitter “will eventually become profitable” he says, “but its specific success may be systematic of a general societal failure. Even though it improves our lives in certain ways, it is not enough to take our civilisation to the next level.” That’s the point, the thing is, all the investment and focus on the Internet and mobile technology helps with improving communication and this enables us to make our lives and businesses much more efficient. However, innovations in areas of energy, transport, medical and engineering have largely only been incremental not revolutionary over the past three decades. “We are living in a material world, so that’s a pretty big miss out” concludes Thiel.
Let me give you an example of what Thiel and Roberts are alluding to. There have been many great innovations over the past decade: Smartphones, tablets keep us connected, Apple Watch, fitbit and Up bands measure our heart rate and tell us how many calories we have burnt, we have Facebook – with a community that is over a billion strong an numerous other social media sites such as snapchat, twitter and LinkedIn etc. And on the horizon but still not proven are self-driving cars, 3D-printers that can print plastic ducks, augmented reality and Google Glass. Project Loon promises to connect the world with stratospheric Wi-Fi connecting balloons. Batteries are getting smaller, lighter, lasting longer and charging faster. Soon we will have batteries that will propel a family sedan 500 miles before requiring a charge. These are great innovations there’s no doubt. I’m not arguing otherwise, but are these innovations truly meaningful, are they going to move civilisation to the next level in the way many of the Industrial innovations of the 19th and 20th Century did? I can hear you saying: “Of course they are, just think of the mobile smartphone and how it has changed the world. Look at mPesa in Africa.”
So let’s for a moment consider the innovations of the Industrial era: the combustion engine, automobile and the production line, the light bulb, winged and jet flight that opened the doors for globilisation to flourish, the washing machine that freed millions of women from hours of backbreaking work, and the great Victorian invention of household plumbing. No doubt the mobile phone has changed how we communicate. We can communicate more effectively than ever before. But it only allows us to do something we could already do before, just do it faster, better and cheaper. That’s not the recipe for sustained, wealth generating growth.
Consider answering this question. Which would you give up, your smartphone or household plumbing? We may want to hold onto your phone but after you have taken the third bucket of smelly waste outside and covered it up in the hole you’ve had to dig at the bottom of your garden, I wage a bet you’ll be singing a very different tune.
Yes there have been amazing innovations in the last forty years but I’m not alone in thinking there have been very few meaningful innovations capable of moving civilization to the next level. Innovations in transport, health, energy and engineering are not where the best minds are currently attracted. Why work on a big scientific experiment when you can be a hedge fund manager or a consultant earning big money in the city? This is a big problem for the world’s future. We are blinded by the bling of today’s fast paced mobile computer innovations but sadly not by the substance of these innovations.
What is frustrating is that there is the potential; we have the technology and scientific know-how for incredible innovations and massive breakthroughs. The capability for future innovations to dwarf previous achievements is there. But we do not appear to have the mindsets in the current breed of leaders and politicians to make these innovations a reality. In the last forty years most leaders have stopped fertilising the very soils that are needed for moon-shooting innovations (or dare I rephrase this as Mars-shooting, there are a group of daredevil entrepreneurs like Elon Musk who are shooting for Mars, this is encouraging). But on the whole the majority of leaders have stopped daring or creating the platform to enable their incumbents to reach for the stars.
Case in point: For the past fifty years physicists have been trying to crack fusion’s code. To date scientists have come close but the Holy Grail of a controlled fusion burn is elusive and some say still thirty to fifty years away. Fusion is the process that powers the sun. It’s an immensely powerful force and vastly difficult to control. If the scientists get it right however, fusion offers the promise of ending all the world’s energy conflicts and crisis’s. For in fusion we will have an endless supply of cheap energy – enough to power a planet filled with ten billion energy hungry people for the next billion years – and best of all fusion energy is pollution free offering no side effects to global warming. This is because Fusion is powered by deuterium and tritium, two elements of hydrogen. Deuterium may sound exotic but it is plentiful, easy to extract and found in seawater. There is enough deuterium in a cubic kilometre of seawater to equal the energy of the world’s oil reserves. But funding for the world’s biggest energy fusion experiment has been a problem. Iter, the organisation striving for igniting a fusion burn that generates a net power outage, requires in excess of $16 billion to achieve its objectives and conduct necessary experiments, admittedly not a small sum of money. However, when you consider that the developmental costs of $400 billion for the USA’s fighter jet Lockheed F117 or that the annual revenue from today’s energy markets is $7 Trillion then the amount required to get fusion to a commercially viable level, well it’s a drop in the ocean. Yet here is an innovation that could end global warming and global strife and yet leaders bicker about its cost. The mindsets of what is important for the future of our world are misaligned with the realities of the future and these mindsets have also made their way into the world of work.
Bottom line we are not going to get the type of innovation necessary to support the level of economic growth that results in growing prosperity for all until leaders change their mindset. Business leaders have an important role to play here. But most of today’s leaders have become industrialist not innovators. Innovators and entrepreneurs say this: “Find a problem, find a solution, innovate, take risks, figure out how to make a profit.” An industrialist says this: “Wait until the innovator has figured out how to make a profit, then take that system, copy that system, perfect the system, and drive down costs.” Industrialists do not like change, nor do they like risks. The problem and it’s a growing 21st Century problem, is we have set up our corporations and organisations to disproportionately reward the industrial and not the innovator mindsets. Here’s the snag. The 21st Century is full of challenges which if not solved soon – we are fast running out of time, will result in the century that had the greatest potential ending up being our worst century.
So will the workplace of the future be more innovative? Will it be more passionate? Will the workplace of the future deliver more growth, more efficiencies and more profit? The answer to these questions is well it is up to you. It is going to take new leadership mindsets, we need more risk-takers, explorers and adventurers. We need leaders to rid themselves of the shackles of incremental marginal gains and boldly go where other leaders are too afraid to go. Larry Page the CEO of Google believes that most companies are “happy with 10 percent improvements.” Page believes this entails you are basically standing still and doing the same as everyone else. Page believes in seeking improvements by a factor of ten. Thousand-percent improvement requires tackling problems with the energy and vigor required when on a quest. It requires radically rethinking problems, it means exploring the edges and pushing the envelope of what is possible, this level of innovation involves making the impossible, possible, and having a lot more fun in the process. That’s what the future of work should be; making it happen is up to you.