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The Future of Work

The study of the world of work has always held its fascinations for me. My management career revolved about changing workplaces, and I was always keen to have an understanding of the evolving nature of work to inform my management practices.

To better understand where the world of work was going, I visited as many cutting edge workplaces as I could, to try to get a handle on productive change. I also consulted with so-called “futurists” and became active in such organisations as The Future of Work Foundation.

The microeconomic reform agenda of the Hawke government, helped initiate useful workplace changes. I was determined that we should be part of this change agenda which was seeking to improve Australian productivity and create better jobs for the workforce. I attended and presented many papers at national conferences during this era soaking up as much intelligence as I could to guide my efforts as a manager.

Many of the constraints we faced were due to a reactionary industrial system that was basically dysfunctional because of its desire to pigeonhole workers into anachronistic award classifications and to enhance union membership by promoting debilitating demarcations and work practices.

But even then it was apparent that these retrograde reactions were merely holding the lid on technological changes that would essentially change the nature of work.

It is useful to contrast the workplaces of the sixties with those of today to get some sense of the trends in employment. Because my managerial experience was largely in power stations I will draw on that background to demonstrate the profound changes that have occurred in the nature of work.

A power station in the sixties was a very labour intensive workplace. Such a workplace revolved around its tradesmen (there were no tradeswomen in those days). And because of the union domination of such workforces, every tradesman required a trade’s assistant (TA). No tradesman ever ventured out to do a job without his TA.

What’s more every function required was performed by the resident, in-house, workforce. Even basic cleaning and security functions were performed by your own employees. And out on the coal stockpile, if a couple of times a month you need to move some coal with a bulldozer, that was also at the sole prerogative of your own FEDFA plant operator.

The tradesmen were pretty well employed because there was a range of work to do. The mechanical tradesmen repaired things which corroded or wore out. Some were skilled machinists so that new parts could be fabricated. But over the years with advancements in materials science, corrosion was greatly reduced and new materials and better lubricants greatly ameliorated the amount of wear. In this new environment, parts were replaced at the end of their working lives which reduced the need for skilled tradesmen. Inceasingly modularisation facilitated easy replacement with new equipment, taking away roles traditionally performed by tradesmen.

I could outline how the work of electricians, plumbers, boilermakers, blacksmiths, mechanics and more were similarly affected. But it is east to extrapolate from the mechanical example to the others, so I won’t bore you with that.

But aside from the technical revolution in materials and tribology, another disruptor was beginning to impact on the nature of work. There were major developments in control systems which led to increasing plant automation. This meant that the skills requirement to operate plant was greatly reduced. Plant operators had been regarded as a highly skilled group with great industrial clout leading to high salaries.

But with the advent of programmable logic controllers (PLC’s) and the incursion of computers, the real skills that industrial sites started to depend on, were in the technicians and engineers that could program the control systems and fault find when there were breakdowns. The skills of the traditional plant operator were transferred to the control and protection systems.

In parallel with industrial workplaces pretty well everywhere, numerically, trades people were on the decline.

In my youth when I was pondering a career, my father advised me to do a trade and if I did he said I would have a job for life. This well-meaning advice reflected the workplaces of the sixties, but as the decades passed it seemed to be less convincing. (A study of ABS statistics shows that tradespersons as a percentage of the paid workforce have continued to decline since the 1960’s.)

By the eighties computers were becoming a most disruptive technology in many workplaces and not just in heavy industry. I was keen to see where this technology might lead us. As a result I lead a series of workshops which were designed to see the impact of the new technologies on the workplaces of the future. What we found doing these studies some thirty years ago, seems hardly surprising today but seemed quite radical then.

What we saw was that computers combined with improved communications systems rendered the old idea of a workplace redundant. All the variations of working from home, distributed workplaces and mobile workplaces challenged the orthodoxy. It seemed inevitable that along with different skills sets these evolving workplaces would fall outside existing industrial prescriptions and would therefore make life difficult for unions and render many awards obsolete.

Finally the pervasiveness of the internet commencing in the 1990’s provided interconnectivity and public access to huge volumes of data and information which stimulated a multitude of business opportunities that would have been impossible to contemplate in previous eras.

Now, it would be wrong to believe (even though it was my prime example above) that these changes in the nature of work were restricted to heavy industry. They have been ubiquitous throughout the whole economy. In agriculture, technology combined with the economy of scale of larger farms, has seen a net reduction in numbers employed. Basic office jobs have reduced due to the pervasiveness of the digital economy. Digital technology has caused a reduction in employment opportunities everywhere from banks to the press. In fact the press is a good example of the insidious impacts of technology. The growing impact of social media has both reduced the advertising revenue available to newspapers and provided citizens with free access to news and information. In such an environment newspapers are struggling for survival.

One lesson to be learned from these dramatic transitions is that work that requires few skills is easily automated. Yet on the other hand having skills in itself does not guarantee easy access to employment, as for example a journalist would attest.

Underlying these dynamics is another ill-understood phenomenon – the increasing prevalence of part-time work. In the last decade or so, most of the employment created in Australia has been part time. This is a particular anathema to the union movement, because those in part time work are difficult to organise industrially. I am sure this has been a major factor in the de-unionisation of the Australian workforce.

Yet the respected Australian sociologist and writer, Hugh Mackay, has pointed out that part time work has some benefits. As he has shown, those in full time employment tend to shape their lifestyles around the demands of their work, whereas those in part time employment tend to shape their work around their preferred lifestyle.

I have seen a couple of examples of this recently and they both involved tradesmen/handymen. When getting quotes to do some minor work in the housing complex where I live, the tenderers for the work said they could only work between 9:00am and 3:00pm during which time their children are at school. These men had wives working full time and chose to look after their children before and after school but were happy to work in the window of time that school attendance allowed.

In the past we might have expected the father to work full time and for the mother to seek work during school hours. But the nature of the work these men did made it more convenient for them to take on the part time role. It seemed like a good arrangement to me and both were awarded the work and carried out their obligations without issue.

Our generous welfare system serves to distort the labour market by removing the necessity for workers to locate to where work is available. Two examples immediately spring to mind. The first is farm labourers and fruit pickers. Few Australians seem prepared to work in rural areas for low rates of pay and this work is increasingly performed by overseas workers on temporary work visas. At the other extremes are indigenous people in remote communities who choose to live where there is little economic activity and, as a result, few jobs. Such factors increase our unemployment rate.

High employment levels are generally perceived as being indicative of a healthy economy. Consequently governments use many subterfuges to understate the rates of unemployment. To begin with anyone who works an hour/week in either a voluntary or paid role is deemed to be “employed”. A lot of people who have tried seeking employment and failed just drop out of the scene and are not included amongst those counted as unemployed. Unemployment is also hidden by the fact that young people are encouraged to stay longer at school whether they are effectively learning or not. Paradoxically, schools are often rewarded for their high retention rates, rather than any educational outcomes they might achieve. Similarly, more and more young people are heading off to university thus delaying their participation in the paid workforce. As a result, economists estimate that in many of Australia’s more depressed areas, youth unemployment is well over 20%. This is adding to the huge welfare bill taxpayers are now confronted with.

Beyond this many people are underemployed, ie they meet the requirement to be included in the statistics as employed, but would prefer to have more hours of employment.

Traditionally, in times of high unemployment, the union movement and the Labor party call for more training to be provided for our young people and others (particularly those being displaced from major employers by the closure of plants or similar misfortune). This is an ineffectual response when the jobs are not available anyway.

So what are we to do? Many of the industry sectors that were labour intensive and therefore provided the most job opportunities are now in decline with little prospect of being resurrected. The pervasiveness of technological solutions in the form of computers, automation and robotics ensures that low-skilled work will continue to decline. It is interesting that the great technological disruptions of the past, as for example what transpired in the Industrial Revolution, tended to create new work that those displaced from the old economy could perform. In the knowledge revolution those displaced, who were mainly manual workers didn’t have the skills to take up the new work opportunities that the technology created.

In recent times, education and health services have continued to grow. And you don’t have to be a genius to predict that with an aging population all sorts of support services are going to be required in the future.

Apart from this there has been inexorable growth in the public sector. Unfortunately growth in the public sector does not create wealth. Moreover, because in recent times the public sector employees have received far better wage outcomes than the private sector, it is likely that the expansion of the public sector has stripped resources from the private sector where they might have been more productively employed.

Any government seeking to increase economic activity and thus create more employment must of necessity look to small business. Small business is the major employer in our economy. Governments seem always to want to be attracting and maintaining large industrial projects to suit their political ends. You just need to read the newspapers on the latest contortions to snare the submarine project in South Australia, the Adani coal project in North Queensland or to preserve Arrium Steel.

It is understandable why Labor makes few efforts to promote small business. Small business owners tend to support conservative politics and the people they employ tend not to be union members. But one would have thought a Coalition Government might do more to encourage small business. No doubt the Company Tax break currently before the parliament would assist.

Having been associated with a few, I can assure you small business start-ups are not for the fainthearted. Business owners often stake a lot on their success and unfortunately many fail.

We have seen in recent times a resurgence in the Tasmanian economy largely driven by small business and tourism. In that particular example many of the start-ups might be called cottage industries. Here we have boutique wineries, cheeseries, distilleries, organic farmers and so on. What is distinctive about these enterprises is that they supply niche, high value products. They cater to a discerning clientele that are prepared to pay a little extra for quality food and beverages. Whilst this is a welcome contribution to the economy it is hard to believe that the manufacture of goat’s milk cheese or sheep’s whey vodka will stimulate long term economic outcomes across the nation.

Apart from these more esoteric examples, small businesses are exploiting the escalating opportunities for services across many disciplines that the emerging economy requires.

It is many years since I had the benefit of sharing the insights or the fantasies or insights of futurists. I no longer have the resources to conduct the studies I did in the eighties to glean an understanding of the future world of work. But let me now stick my neck out and make some bold (or perhaps to some of you, obvious) predictions.

Firstly if you desire security of employment there are few options available except to pursue opportunities in the public sector. You might gain the satisfaction of secure employment but at the expense of taxpayers who are deriving less and less benefits from your work endeavours.

Beyond that most employees should expect to have a number of careers, often in different industries if they are to maintain near continuous employment. This will require frequent retraining to maintain a skills base to keep yourself employable. It will also need a willingness to relocate to where the work is.

Despite the protestations of the union movement, part time employment is here to stay. The more flexible and imaginative of you will find ways to fashion part time employment around your preferred lifestyle. For such people part time employment is not to be feared.

Skills will always be important. The inexorable advance of computers, robotics and automation will ensure that low skilled employment will continue to be eroded.

Some pundits are predicting further population shifts from regional centres. They argue that many of the services required in regional communities can best be provided from large population centres availing themselves of digital technology. This would remove more service providers from regional centres.

I am not sure this will be the case. I think there will continue to be regional hubs that have sufficient population to maintain a broad service base. What’s more the very technologies that people argue enable regional centres to be serviced from major cities, also enable those who choose to live in regional areas the same opportunity to market their services anywhere they choose. Such considerations as lifestyle and housing affordability will surely continue to attract people to regional areas.

The conventional wisdom asserts that the jobs that come in the wake of disruptive technology haven’t been invented yet. That may or may not be true. But it does require us to exemplify the attributes that Malcolm Turnbull has almost turned into a cliché, of innovation and agility. There is little doubt that those who prosper in the wake of such disruption need to be:

  • Resilient,
  • Adaptable,
  • Sufficiently mobile to avail themselves of job opportunities,
  • Innovative, and
  • Committed to lifelong learning.

Lifelong secure employment is a thing of the past. The only thing you can do to enhance employment security is to work at improving your employability!

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  1. 3 Comment(s)

  2.   By Greg Brown on May 30, 2017 | Reply

    Ted, back in 2015 I was fortunate through my work to have access to a futurist and his research from the CSIRO. Adding this information to the outcomes from the think tanks you organised for us back in the 90’s has painted an exciting although to many a frightening picture for the future. As you pointed out there was the industrial revolution that essentially removed muscle workers from the work force. One backhoe replaces more than 50 guys with a shovel. This created more work for trades though as more machinery required more service staff. The next transformation though was automation where machines built machines at a fraction of the cost of people. Factory production worker numbers fell and so did the need for trade’s people. Why fix it if you can replace it at a lower cost. The disposable world came into being and with it the idea of the knowledge worker. People who had to program the automated machines and people who had to make the decisions on how to continuously improve the factories or industrial sites where the machines were used. That is perhaps still where we are at, but there is another major disruptive technology starting to appear. Artificial Intelligence (AI). AI has the ability to replace many knowledge workers with advanced computers. Some industries that are considered all but bullet proof are going to take a hit. As an example automated vehicles will threaten all drivers in all industries (trucks, taxis, aircraft, and trains). This is probably accepted by most people but AI goes much further. Doctors will also take a hit. A software program with a massive database behind it, asking the right questions is far more capable of diagnosing and prescribing treatment than the most capable human. This is already happening and it will grow. There may be an intermediary handing out advice the same way that planes still have a pilot even if they don’t need to touch anything. Over time though this will change. Banking will also be transformed as will many other knowledge industries.

    The issue for the future I do not think is a lack of productivity or wealth. There is plenty of wealth and we are creating it at an exponentially increasing rate across the planet. The problem for the future will be wealth sharing and the creation of meaning. If we have a world where machines do all the work including creating more machines and these machines do most of the thinking, how do we share out the wealth that they create and how do we give people who are doing nothing meaning in their lives? I believe this is the biggest challenge society has ever faced. Failure to solve this problem may well stall the advancement of society and create an economic depression. If we don’t find a way to share the wealth there will be no need to create it. The economy needs consumers that have cash to spend and this will require better wealth sharing. Just sharing the wealth is not enough however. We need to do it in a way that creates meaning for people. I have no facts to support it but I am pretty confident those people on welfare are not the happiest people in society. This needs to change or it will not just be the economy that suffers with depression.

  3.   By tedscott on Jun 3, 2017 | Reply

    Thanks Greg for a very thoughtful summary.

  4.   By Mark Shaw on Jun 4, 2017 | Reply

    Greg. I totally agree with your comments. How humans continue to find meaning when automation is encroaching more and more is the challenge. While I don’t know the answer, I am optimistic we will find a way.

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