With the socio-economic change that is picking up pace thanks to a number of factors including the ongoing pandemic, one wonders about the root causes of this dramatic socio-economic change. While some would point to the changes in technology as the root cause of these socio-economic changes, it could be argued that the way in which we have developed new technological innovations is a driving factor. In other words, how we have organized and incentivized individuals to develop these new technological innovations.
If we look at the original technologies that have powered the technological innovations of the late 20th and early 21st centuries, they were created based on the old methods of organization, mainly through centralized control and need. Whether it is the Internet or the personal computer, they were created by large organizations. The Internet was created thanks to DARPA while the personal computer was created thanks to IBM.
In many respects, technologies such as the Internet and the personal computer were products of their organizational design which was driven by a command and control hierarchy. With today’s new technological innovations however we are seeing a dramatic rethink of not only how we work but what we individually work for.
The fundamental difference between yesterday and today when it comes to work is significant. We’re in the midst of a transition where an increasing number of individuals are working not because they have to but because they “want” to. What do we mean by “want to”?
What human society has been increasingly seeing is a transition from having to work to choosing to work for purpose. Thanks to automation and technology, we have slowly started the process of enabling individuals to choose what they want to work on.
In the past, human capital was required to execute on any ideas. Whether it is constructing a building to completing mathematical calculations, the majority of human civilization has been powered on human capital. Today, though, that is increasingly changing.
No longer do entrepreneurs and creators purely need to rely on human capital to fulfill their ideas and vision. There are an increasing number of tools and systems that enable entrepreneurs and creators to execute their ideas and vision without having to cajole or convince other individuals that their ideas or vision is the right one to pursue. While this empowerment of entrepreneurs and creators to fulfill ideas and vision has its benefits, there are also potential drawbacks that we must manage as well.
There is no doubt that the ability of entrepreneurs and creators to fulfill their ideas and vision has created faster innovation and overall speed to market but one wonders about the consequences. Specifically, as individuals have the ability to push ideas and vision out to market independently, what are the implications on society?
With the ability of entrepreneurs and creators to create and push their ideas and vision out to market in an independent manner, one wonders of the societal ramifications including:
(1) Does the ability of entrepreneurs and creators to independently push their ideas and vision out to the market independently further concentrate overall power into the hands of fewer and fewer individuals?
(2) As fewer individuals are needed to fulfill ideas and vision, what will individual contributors end up doing? Will they have to be retrained? Can they be retrained?
(3) Is the fundamental balance between employee and employer changing? What will it look like in the future?
(4) With the ability of entrepreneurs and creators to appeal and hold onto individual market segments are we increasingly at risk of fragmenting the market to the point that larger entities cannot achieve economies of scale?
Indeed, as entrepreneurs and creators continue to push out their ideas and vision at breakneck speeds, governments, social impact organizations and others are starting to slowly catch up to determine how society will change in the future. The main reason for this is the changes that have occurred over the past several decades have radically altered the foundations of not only society but the economy as well.
In many respects, the technologies that have enabled entrepreneurs and creators to independently push their ideas and vision out to market has further decentralized how work is completed. From an individual employee perspective, it is causing a great amount of wariness and uncertainty as foundational assumptions are being greatly disrupted.
No longer are employees guaranteed a “cradle to grave” career path. The social contract of the older generation is increasingly tenuous at best between employer and employee. Increasingly, employees must carve out their own individual career path, one that is based on self sufficiency and flexibility.
While much has been written concerning how individuals need to adapt, what about employers regardless of whether they are startups or large corporations? The reality is that employers will need to adapt as well. Those individuals who have adapted to the new reality of “self motivated” work will be in high demand and increasingly employers may find that they may have to pay a premium to acquire the best talent or risk falling behind.
As high performing individuals realize that not only are they in demand but that they can make career choices that benefit them over both the short term and long term. Employers are increasingly realizing that they will have to pay a premium to higher these top performers and also be ready for them to transition to new opportunities when their current one no longer interests them.
The balance of power has increasingly shifted towards employees as demonstrated with the pandemic. Many, who were once fearful of being unemployed or unable to change careers, are realizing that they are able to take control of their careers and have nothing to fear but inaction.
Where this rebalancing of power between employers and employees will settle remains to be seen. Indeed, it might be quite a while before the dynamics settle into a predictable pattern. As such, both employees and employers will have to settle in for a bumpy ride over the next few years as society sorts out what its foundation will look like. |
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