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Welcome To the Great Reset. Start Managing For Perpetual Change.

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We surpassed the unemployment of The Great Recession. In two weeks. For our economy and our society, we need to flatten The Slump.

As the surreal impact of the pan-global pandemic sinks in, we can all be forgiven if we feel suddenly thrust into a dystopian science fiction movie. When it comes to work and our economies, The Great Reset has accelerated so many tech-fueled trends that the list grows daily. To paraphrase sci-fi author William Gibson, the future of work is here. It’s just not evenly distributed.

We’ve known for some time what we needed to do. We’ve talked about Digital Transformation, Agile Organizations, and Lifelong Learning until they’ve become cliches, more observed in aspiration than in practice in too many organizations.

Then along came a virus.

Suddenly:

  • We are working as fully-distributed teams, with every in-person meeting instantly transformed into a Brady Bunch-style videoconference scrum.
  • Our organizations are being forced to adapt literally overnight. This isn’t agility, though. It’s a survival reflex.
  • Colleges have become hybrid learning platforms, virtual and physical, likely transformed forever, while adult online classes are also surging.

And societally, we are rapidly turning into Amazon-ordering, Zoom-clustering, auto-cocooning consumers. (Nothing new. Just exponentially more.)

The speed and scope of these changes dwarf prior shifts so dramatically that we would have probably stopped binge-watching any streaming video movie that hung its narrative on such an implausible plot. Superlatives fail. The exponential curves of technology adoption like the microprocessor and the smartphone used to be the sole purview of Singularity University lectures (including mine, on the future of work). But the progression of the novel coronavirus has seared the image of hockey-stick growth on a billion minds.

But there is a reverse hockey stick at work, an exponential Slump. It’s called Jobs.

We have seen this script before. Each of the modern economic downturns – early 1990’s, 2001, the Great Recession – had a seismic impact on the world of work. But to take the risk of quoting those pundits of exponential change, Bachman Turner Overdrive, you ain’t seen nothing yet. John Hagel from Deloitte’s Center for the Edge calls these tectonic transitions Big Shifts. The Great Reset may become the Biggest Shift in our lifetimes.

What happens in such transitions?

  • Unemployment musical chairs means the music stops for millions. The Great Recession at its peak displaced about 9 million – a level we hit this time in just two weeks. The Fed suggests that nearly half of all jobs – 67 million- may disappear. Let that sink in.
  • Automation accelerates. Each of the last three recessions dramatically increased technology implementation in business. As Mark Muro of Brookings Institution says, “What can be automated, likely will be.”
  • Unbundling work accelerates that process. As we distribute and atomize tasks, we make it far easier to mobilize AI software such as Robotic Process Automation, which automates routine tasks like filling out forms and moving documents through workflows–the kind of work done by millions in call centers, for example. And the hyper drive to increase productivity and reduce costs in the post-Reset economy will place enormous pressure on organizational leaders to only re-hire people for the most critical roles.
  • The Middle evaporates. From 2007 to 2017, the vast majority of new hiring in the U.S. was in non-standard, impermanent roles. The low end of wages has already become the realm of precarious gig work, and the upper wages are reserved for veterans and experts, like blockchain and AI programmers. Technology inevitably reduces the amount of middle-skilled work.

The Unemployment Slump is likely to happen in three phases.

  • In Phase One, there is a downward plunge in employment, and a dramatic rise in business failures. We could hit the bottom as soon as June.
  • In Phase Two, as we riffle along for an indeterminate period, some geographies will begin recovery, but it will literally be like a fever chart, with intermittent employment wins and losses. This could last a quarter, or maybe it could last a year and a half. Much of the work people do find will be informal, precarious, and impermanent. And then a third wave of failures will appear, when municipalities and states see huge drops in tax revenue.
  • In Phase Three, the recovery accelerates. Some industries will bounce back rapidly, but others, like hospitality, air travel, and tourism, will take far longer. And as history is our guide, it will leave many behind, especially low-wage workers and those in rural areas.

So here in Phase One, if we want a thriving Phase Three economy, we need to get busy. We must:

We need to do this because it’s the right thing to ensure every human has access to meaningful, well-paid work. Or, if that’s not enough incentive, do it because otherwise, you won’t like the economy we get later.

The Great Reset will forever transform everyone’s lives in many ways. The most important way is that this virus has in a few short months shown us the interconnections between virtually every human life on the planet. But after the health of people comes the health of work and the economy.

No human left behind.

Gary A. Bolles is the Chair for the Future of Work with Singularity University. He posts regularly on LinkedIn.

How A.I. Will Create A New Era Of Entrepreneurship, And As Much Meaningful Work As We Demand.

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Journalists and commentators are trying to instill in us the fear that robotic automation, using artificial intelligence, will eliminate many, perhaps a majority of, jobs. We will all require a universal basic income, we’ll lose the sense of worth that comes with purposeful work, and we’ll have to shift our focus to figuring out what to do with our spare time.

These commentators forget – or, more likely, they never understood in the first place –  one of the first principles of economics: customer sovereignty. The customer is king. The customer determines what is produced by the act of buying or not buying. Anything the customer buys or wants to buy – i.e. there exists what the economists call demand – producers will figure out how to produce, and how to produce more and better, and how to produce more variations. If people want jobs, then they will be produced.

Robert Lempert explores this potential for AI to produce more meaningful work for humans in an article he titles Bezos World or Levelers published at AIPulse.

He observes that it is potentially possible that technology could destroy vast numbers of jobs – as many as 40% of the world’s jobs could be replaced in the next 15 years. Skills training, social insurance programs, and universal basic income (UBI) could only nibble at the edges of such a major social transformation.

But Lempert argues that the threat that AI poses to the system of jobs and meaningful work exists only because the giant tech companies that, so far, dominate the application of AI in commerce are deliberately creating the threat to further their own interests. They will make profits from automation, both directly and by selling it to other large corporations who want to substitute computer code and robots for expensive employees.

In order to explain the possibility of a totally different kind of outcome from the current technological revolution, Lempert first goes backwards in history rather than forwards. He returns us to the original promise of free markets. They shattered aristocratic hierarchies and government-chartered monopolies. They promised “a world of independent proprietors, whose few employees would be young apprentices on their way to running their own small firms”. He quotes Abraham Lincoln as a proponent of this vision, and he might have added Thomas Jefferson or even Adam Smith.

But another revolution undermined this happy vision by “creating economies of scale that required vast enterprises to exploit”. While this revolution greatly expanded consumer choice and convenience in travel, electric light, food and clothing, it also generated new hierarchies of power and wealth in large corporations. Industrial age production required large agglomerations of capital, and those reinforced the imbalances of the power hierarchy.

AI, says Lempert,  is being deployed by new but similarly large corporations towards a future in which machines do all the work and technology is used to maximize power and wealth in the hands of a small number of companies who own the capital. Why do corporations use AI to replace people with machines? Because that’s their goal.

But it doesn’t have to be this way. Lempert says we can just as easily imagine – and act purposely to create – a very different scenario in which we as individuals use technology to unwind the large corporations and disperse the productive capital into more hands in order to use it better.

He asks why we need these big corporations in the first place. Economists point to transaction costs: productive assets need to be organized within managerial hierarchies associated with large stocks of capital. Today, corporations add centrally managed proprietary data (often gathered from customers), and sell services that enable the collection of the data and the AI learning from that data to make services more efficient and effective.

But AI does not necessarily have to be used in support of centralization of organization and concentration of economic power. It can be used to reimagine the firm and reverse the existing power arrangements. Think of it in the role of helping labor to hire capital, instead of helping capital to dispense with labor. Let’s imagine a small team wanted to join together to build a new kind of car. AI would help them identify others with the skills they need for design and resource assembly, and to rent 3D manufacturing facilities to produce their design. Or AI could help drivers and passengers get together using competing databases without the need of an Uber to own the network. Overall, Lempert says, we could envision an economy of radical equality in social and economic opportunity, in which everyone’s an entrepreneur, finding their highest and best use, and hiring the capital and connecting to the collaborators necessary for efficient production, in a world of abundance, choice and convenience.

What has to change? The way we write algorithms. More specifically, the demand for the scenario that Lempert imagines must drive the producers of algorithms to new forms and designs – algorithms with different goals and functions than those that are common today. Algorithms can “enable individuals to make reasoned and consequential choices about their own lives, to act on those choices, and to evaluate the results in terms of their own goals and values”.

Many of today’s most touted algorithms are designed to reduce this “reasoned and consequential” human choice. Such algorithms start with a clear objective and a set of actions they can take, and they choose the actions to best achieve the objective. Drive this car to that destination without accident. The algorithm determines that the best method is to reduce human involvement. Such algorithms employ predict-then-act analysis, aiming for a single computer-generated understanding of the future and making prescriptive recommendations for action. They are designed to operate independently from human subjectivity and influence.

What if the algorithm had the objective of helping to improve the human experience? It could certainly help individuals gather resources, including skills, capital, and material resources, and connect to appropriate human collaborators. It could help the individual make good choices, examining those choices from multiple vantages and explaining the choices to others. Such algorithms do exist. They are called agree-on-decision algorithms and follow a process called “deliberation with analysis”. They can facilitate a collaborative process of social choice, where everyone recognizes that there can be many competing views and are judged by the extent to which they empower people involved in the process to make what they subjectively regard as meaningful choices. Do you want purposeful work? Then choose it. AI can help.

In other words, it all comes down to demand. What kind of a world do we want? Let’s make sure we communicate our preferences to the algorithm producers.

America Is Raising The Least Work-Prepared Generation In History.

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In recent years, Americans have grown quite wary about the work readiness of both high school and college graduates. Just 5% of U.S. adults say high school grads are very prepared for success in the workplace and 13% say the same about college graduates. There are several areas for improvement to point to within schools and colleges, but here’s one real simple explanation for why today’s students aren’t ready for work: they are the least working generation in U.S. history.

As recent studies by Pew Research have pointed out, today’s young adults (between the ages of 15-21) are much less likely to have had a paid summer job or to have been employed in the last year compared to every previous generation for which data exists. In 1948 and 1978, 57% and 58% of 16-19 year-olds had a paid summer job. By 2017, only 35% reported having a summer job. The percentage of 15-17 year-olds who reported working in any fashion in the prior year has dropped from 48% in 1968 to a mere 19% in 2018. And the percentage of 18-21 year-olds reporting working in the prior year has dropped from 80% in 1968 to 58% in 2018.

These data represent a stunning collapse in the work experience of young adults in America. It’s really no surprise that one of the outcomes of this collapse might be a sense that high school and college graduates aren’t well prepared for the workplace. In fact, it would be more surprising if we felt they were prepared – as opposed to being surprised they’re not. On top of the fact that work experience among young adults has declined dramatically, very little of their typical high school or college studies prepares students well for the workplace.

The factors of college that are linked to success in the workplace, unfortunately, happen for too few graduates. And although there are promising increases in practices such as project-based learning (which gets closer to mimicking real work experiences) in high schools, there’s still a very long way to go. Only a third of college graduates had an internship during college where they were able to apply what they were learning in the classroom. But those who did were twice as likely as those who didn’t to have a good job waiting for them upon graduation. With such a profound relationship, it’s fair to wonder why an internship or co-op isn’t a required component for graduation.

It might be easy to point much of the blame on colleges for not making internships a bigger part of students’ experiences, but employers share equal burden and blame here. After all, with the small exception of work study opportunities, colleges and universities don’t have jobs and internships…employers do! We’re going to need the equivalent of a moon shot plan for stimulating a new ecosystem of employer-to-university partnerships around internships and co-op experiences. This is a place where government intervention (in the form of new incentives for employers to dramatically boost internships) would be welcome.

Internships aside for a moment, we’d be wise to carefully examine why today’s young adults are so much less likely to be working than previous generations. This is something that the research has largely missed – other than to offer wide-ranging hypotheses including fewer low-skill, entry-level jobs available, teens doing more unpaid community service for graduation requirements and college applications, and more young adults enrolled in high school and college compared to previous generations. These could all be factors, for sure. But I’d add some additional “signaling” elements that could be of serious concern: parents have devalued real work in favor of school homework and higher education admissions offices have devalued paid work over extracurricular activities. These sentiments have been captured by the common refrain among parents that their child’s “job” is to “get good grades,” and we’ve grown familiar with the expression of “padding one’s resume” with lots of extra-curricular activities to impress college admissions offices.

More broadly, perhaps we have devalued the learning value of work.  And that could be the biggest disaster of all. In a world that has increasingly emphasized the importance of education, it would be a catastrophic failure to not celebrate the educational value of work and the ways in which school-based learning can and should enhance work opportunity and performance. These are not mutually exclusive values or functions; they reinforce each other.

The good news is there are signs of hope that the pendulum may be swinging back to favor the value of work. Whereas our current generation of young adults and parents may have been distracted by seemingly shinier objects for achieving success, the coming generation of parents with school-age children place strong emphasis on the value of good old-fashioned work. In a soon-to-be-released study I led, 9-out-of-10 of these parents agree “you can learn a lot from a job” and that “work is important for personal growth.” Clearly, they believe we have work to do and so should the rest of us.

Brandon Busteed is President of Kaplan University Partners and former Executive Director of Education & Workforce Development at Gallup. This article first appeared at forbes.com.

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