Navigating the future of work

26 July 2017

As work gets disconnected from jobs and the gig economy gains momentum, what will offices of the future look like? With an augmented workforce, many of your co-workers may not even be human. Jeff Schwartz and Tom Friedman talk about skillfully navigating these uncharted waters.

The headlines, especially in the last couple of years, have been a version of "The robots are coming, we’re doomed!" or "The robots are coming, we’re saved!"


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TANYA OTT: I’m Tanya Ott and this is the Press Room, Deloitte University Press’s podcast on the issues and ideas that matter to your business today. Today we’re gonna look into the crystal ball to divine the future of work.

For millions of years, we were hunters and gatherers. Then, 10,000 years ago, we learned how to cultivate crops and domesticate animals. We became agrarian and that’s how we stayed for many thousands of years, until the late 1700s and early 1800s when, in quick succession, we created the power loom, the first machine tools, and steam engines.

The industrial revolution lasted about 100 years. The technical revolution—with its incandescent lights, boring machines, petroleum, rubber, synthetic dyes, cars, telephones, and radio—lasted roughly 50 years. The scientific-technical revolution was just 30 years long (1940–1970) and gave us Sputnik, credit cards, disposable diapers, defibrillators, hair spray and cat litter, cable television, video games, airbags, barcodes, artificial hearts, the computer mouse, CDs, and the first virtual reality.

The information and telecommunications revolution? You’re living in it now. Personal computers, voicemail, mobile phones, UPC barcodes, digital cameras, space shuttles, the Internet, robots, smartphones, social media, artificial intelligence, [and] virtual and augmented reality. All of this to say—our lives are moving really fast and it seems like new technological advancements are announced every day.

JEFF SCHWARTZ: It’s hard to keep up. But we’re going to have to if we want to live and work in the world.

TANYA OTT: Jeff Schwartz spends a lot of time in this headspace. He’s a principal in Deloitte Consulting, but his own path to that role is pretty circuitous. He studied intellectual history and political philosophy as an undergrad, then he volunteered with the Peace Corps in Nepal. He worked for a small foundation in Washington, went back and got an MBA and a master’s degree in economics, spent some time in investment banking, and moved his way into management consulting with stops in Kenya, Russia, Belgium, and India. So he’s seen and thought a lot about how people all over the world work.

JEFF SCHWARTZ: The headlines, especially in the last couple of years, have been a version of the robots are coming, we’re doomed, or the robots are coming, we’re saved.

TANYA OTT: Jeff co-authors a new article titled Navigating the future of work, which raises some big questions: What will work look like in 10, 20, 50 years? What’s driving the changes? What does this mean for workers? Companies? Governments and public policy?

The article starts with reference to [a] 1930s essay titled Economic possibilities for our grandchildren, which foretold a future of technological unemployment and 15-hour workweeks.

JEFF SCHWARTZ: We're not seeing that. That's a very famous essay by John Maynard Keynes and what's interesting about what Keynes was writing about is he got part of the story right and he probably got part of the [story] wrong. The part of the story he got right has been the incredible journey that we've been on around technological innovation. If one looks at the role of technology from the 1930s to the 2020s, the eras that we're about to move on, technology is clearly what's driving productivity and growth in the economy.

It's a funny thing to say, but what Keynes maybe got wrong was [our] ability—and this is a challenge for us today—our ability to think through how adaptable we are learning to work with new technologies and new tools. It's clear that the work that we were doing in the 1930s is very different than the work that we're doing today. So many of the things that we do today—computer programming, the amount of time that we spend in health care, the amount of time that we spend in education—these are professions that have grown very significantly in the last 75 years.

TANYA OTT: That points to what I was thinking when I heard the [term] “future of work,” which is how can we possibly wrap our arms around that given how quick technological advances are coming at us. At a very high level, how would you describe how you view the future of work?

JEFF SCHWARTZ: Here's how I think about the future of work. The phrase that we often come back to is the idea of an augmented workforce. The idea that all of the work that we do will be augmented, will be in some ways extended in different ways. It's really being extended in three different ways. One is the way that the work that we do is extended by working with smart machines. One of the predictions that I often make is that in the next five to seven years, we will all be working next to and with smart machines that we're not working with today. That will change and augment what we do.

A very simple example of this is only 10 years ago in 2007, Steve Jobs and the team at Apple invented the modern smartphone that we're all carrying. Ten years later, there are billions of them in the world. It’s an absolutely pervasive technology [that] has changed the way everybody works. We expect to see not just digital machines but machines that are capable of machine learning and all of us will be working with these smart machines. All of our capabilities will, in some sense, be extended. That's a big challenge for us: how do we actually work with these machines.

THOMAS FRIEDMAN: I do give the example of Qualcomm in my book…

TANYA OTT: That’s Tom Friedman, New York Times columnist and three-time Pulitzer Prize winner. His latest book is Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations. He sat down with John Hagel—co-director of Deloitte’s Center for the Edge—and Deloitte CEO Cathy Engelbert for a wide-ranging conversation on the future of work, including an interesting, early step that Qualcomm is taking.

THOMAS FRIEDMAN: They took six buildings and put sensors on every door, window, HVAC system, computer, light, pipe, and faucet. They beamed all that data up to the cloud and then they beamed it down onto [an] incredibly user-friendly interface for their janitors. They turned their janitors into maintenance technologists. So now if John Hagel leaves his computer on or a pipe burst above his head, the janitor knows it as fast as John does. They've turned their janitors into maintenance technologists and their janitors now give tours to foreign visitors.

TANYA OTT: Tom says the other big trend he sees is…

THOMAS FRIEDMAN: Work is being disconnected from jobs. And jobs and work are being disconnected from companies, which are increasingly becoming platforms.

TANYA OTT: Basically, in the future, many of us will be working in an off-balance sheet economy. You might also call it the gig economy or lots of side hustles.

THOMAS FRIEDMAN: We have in Bethesda a cab company that owns cars and has employees who have a job. They drive those cars. They're competing now with a company called Uber, which owns no cars, which has no employees, and just provides a platform of work that brings together ride needers and ride providers. I do think that [the] Uber platform model, and the way it is turning a job into work and monetizing work, the broad trend, I think that is the future of work and that will have a huge impact on the future of learning. Because if work is being extracted from jobs and jobs and work are being extracted from companies and because we're now in a world of flows, learning has to become lifelong.

TANYA OTT: There was a recent report from the National Bureau of Economic Research and there were some leading labor economists who did an analysis of the net new employment in the United States between 2005 and 2015. [They] found that 94 percent of that net new employment was from these alternative work arrangements that you talk about—everything from gig to freelance to off-balance sheets kinds of work. For many of us, we thought that that was a consequence of the economic downturn of the late aughts, but what you're saying is it's just a new reality, perhaps driven by the economy, but perhaps driven even more so by technology.

JEFF SCHWARTZ: The report you're referring to is one of my favorite reports. I love the statistic that 94 percent of net new employment in the last decade in the United States is characterized as alternative work arrangements. Ninety four percent is about as close to 100 percent as you can get and effectively what the data [is] showing us is that the growth in net new employment is coming from this off-balance sheet, this gig economy, this freelance economy. I think it's driven by a couple of things. Technology is part of it. One of the things that John Hagel and Josh Bersin, and I have looked at is where we think the gig economy is going to go and we think that gig economy is going to evolve from individual workers working on platforms like Uber to teams of workers working in a project-based world.

THOMAS FRIEDMAN: Whatever can be done will be done. The only question is, will it be done by you or to you? Let's use an example that people wouldn't normally think about. So General Electric woke up one day in 2013 and said, “Geez, whatever can be done will be done.” So I'm GE now and I'm trying to figure out how to take the most weight out of a fastener that fastens an airplane engine to the wing of an airplane because that's my business. When you take weight out of anything, especially on an airplane, you save fuel. Over the life of a plane, if you can actually reduce the weight of a fastener by 70 or 80 percent, you've saved enormous money.

But GE sort of looked at itself internally and said, “Well, I live in a world now where I can actually take advantage of the brains of anybody to take weight out of this fastener.” So they went to the main engineering website and they simply created a contest, what they call a jump ball. They described the fastener they were currently using, the weight of that fastener under the wing of the plane attached to the engine, and simply threw up a jump ball: Who in the world can take the most weight out of this fastener? And they offered $20,000 in prize money; I think it was $10,000 to the winner and then several thousand to those who came in second, third, fourth, fifth—the top ten, I believe. Within six weeks, they got over 600 responses. The 10 finalists were all tested by GE engineers and they picked the winner. None of the 10 finalists was an American. I believe the winner was a 21-year-old from Indonesia who is not an aeronautical engineer and he took 80 percent of the weight out of this fastener. The notion that within our stock of engineers we have all the best talent in the world, what are the odds of that in a flat fast world? Let's actually create jump balls and access all the talent wherever it is.

TANYA OTT: Let me follow up on that with a question that I think a lot of people may be thinking about which is, as we go to more of a gig-based and project-based economy, what are the implications for businesses economically? Because if you're taking people off the full-time payroll and rolling them onto this gig system, you don't have benefits lifts, you don't have a lot of other economic responsibility for them.

JEFF SCHWARTZ: The question that we're raising as the nature of work changes from on-balance sheet to off-balance sheet, as work moves from being primarily done by employees who hopefully working for companies have a decent set of benefits, [is how] the equation really is shifting. This is what's behind this question. The big challenge right now, and one of the reasons that we try to zoom out and look at what does [the future of work] mean for individuals, what does this mean for businesses, and what does it mean for governments, is exactly this question: If half of the people in the economy are working in an economy that is defined by gigs and projects, we absolutely need to find ways both for us as individuals and businesses, but especially for governments, to be creating programs so that the way that we calculate employment and benefits, the way that we provide services, the way that we provide education, really begins to be organized around the transitions and the challenges that we're seeing now as we're going through this transformation from on-balance sheet to off-balance sheet work.

It's a very significant challenge for businesses and governments together. And one of the things that we're hoping in the research that we're doing now is to give both business leaders and government leaders—and us as individuals—a sense of what this agenda is. A big part of this agenda, as you've outlined in the question, is how do we make sure that the benefits, the education, [and] the transition allowances that are probably required are going to be part of both government and business services.

TANYA OTT: What kinds of programs or experiments are you seeing or are you hearing about businesses thinking about exploring?

JEFF SCHWARTZ: There are three categories of activities that we're seeing governments and business explore. One goes back to the question on the report from the National Bureau of Economic Research. We need to make sure that governments and universities are collecting data on all the different ways that people are working. We need data on the gig economy, we need data on the freelance economy, [and] we need to understand the benefits that people have access to. That data largely comes from governments and educational institutions and some from businesses. We need to redefine the data categories so that we can understand the economy that we're going into. A new world requires new measures.

The other thing we need to do is to look at the impact that this has on educational programs and institutions and this is a major area of our research. The once-and-done model of university and technical education is gone going forward and the need for ongoing education, literally lifetime education, means that the institutions that we have, the way we finance education, is going to require changes that will both be seen on the government side and the social institutions.

Finally, there are two big categories [where] there are a lot of experiments going on around the world looking at a guaranteed basic income—some way of making sure that everybody has enough money to live. In the US, this is done often through tax programs. In other countries, it's done by direct subsidies.

TANYA OTT: That leads me perfectly into the question that I've been wanting to ask from the beginning, which is that it seems entirely likely that these future work scenarios could further increase the economic divide between low-skill and high-skill workers and developed and developing countries.

JEFF SCHWARTZ: I think that the question of how the future of work and the evolution of work is going to impact divides in the economy, how it's going to impact the trends that we've seen globally around inequality, is an absolutely critical question to put in the middle of the discussion. In some ways, the trends around the future of work, especially given the returns to technology and capital, can actually make the situation probably even worse than it is today. The flip side is looking at the role that education and training will have going forward. One of the things that we're seeing now as we move [toward] the future of work is the central role of ongoing learning and education. We're also seeing that in many ways education and the access to skills is being democratized. When we think about, whether it's massive open online courses or programs like the Khan Academy that make all types of great training and learning available, it's quite interesting and very significant for us to look at.

Probably one of the things that will have the biggest impact on inequality and some of the divides will be the access to different kinds of educations and different kinds of skills. But it will require some active focus from governments and businesses and individuals working on it together. One of the challenges over the next couple of years is to really develop these agendas so that we have something that we're aiming for around how the future of work is going to play out.

TANYA OTT: What's the one thing that you would advise leaders of organizations to do now to prepare themselves and their organizations for the work of the future?

THOMAS FRIEDMAN: The first thing that comes to mind is something I'm arguing for America in general right now which is to do something that would strike many as deeply counterintuitive—that when we move into a world of flows and the flows are the source of strategic advantage where you extract value and the flows are getting faster, it seems to me that rule No. 1 is you want to be radically open. That's a really hard sell right now because it feels so counterintuitive and everyone's putting up walls, right when you want to be actually radically open.

Why do you want to be radically open? Because you'll get more flows. You'll get the signals first. And you will attract more flow-minded people, which I would call high-IQ risk takers. That's from a country point of view. I have to believe that's also right from a company point of view, that is, you want to be plugged in to as many discussions, as many places, and as many flow generators as possible because you'll simply get the signals first in order to understand where the work of the future is coming from.

JEFF SCHWARTZ: The major recommendation that we have for business leaders, and maybe this is a funny way to put [it], is to actually have a point of view and to actually have a plan that integrates the different elements that we've been looking at. One of the challenges that we're seeing now is that the programs that companies are beginning to put in place around the future of work are very fragmented. It's almost like the scarecrow in the Wizard of Oz—a piece of the program over there, a piece of the program over there, and a piece of the program somewhere else. What we're encouraging companies to do is to think about over the next three to five to seven years, how the work and the workforce that you have is going to be probably dramatically redefined and reinvented. What's your plan for automation and artificial intelligence? I call that the “what” question. What work is going to be done by machines? Who is going to do the work? Who's going to do the work in terms of people that are on your balance sheet and off your balance sheet? How can you use both freelancers in the gig economy and the crowd to actually get your work done and do you have a plan for that? And the third question is where the work is going to be done. How can you virtualize work?

THOMAS FRIEDMAN: Stage one is we all go solo. Stage two is some real estate developer comes along and says, “Well, you're all solo, so I think I might go into the worker-space business.” And then they create a great place for solo innovators and entrepreneurs to rent office space. Then somebody is going to come along and say, “Gosh, y’all need meals and y’all might need health care advice. And by the way, you might need pension advice.” And so I think it'll all start to adapt around this. And again, if you're free flowing and you're flexible and adaptive, human creativity is boundless.

I'm not sure what the work of the future is, but I know that the future of companies is to be hiring people and constantly be training people who are prepared for a job that has not been invented yet. If you're training people for a job that's already been invented, if you're going to school in preparation for a job that's already been invented, I would suggest that you're going to have problems somewhere down the road.

JEFF SCHWARTZ: One of the ways that we often describe the future of work is this notion that we're all going to be working next to and with smart machines that we're not working with today. Machines are not only really good at automating work. Machines are good at learning really, really fast and there's going to be a new partnership between individual workers and machines and I think we're just beginning to figure this out.

One way to look at how people and machines are going to work together in the future is to pick up on the work of Andy McAfee and Erik Brynjolfsson at MIT, who just published a book earlier this spring. The book is entitled Machine, Platform, Crowd. Part of what they do in the book very, very well is they look at the evolution of machine learning and they point out something very interesting. Starting in the 1980s and the 1990s, we developed what they refer to was the standard contract between machines and people. The idea was that machines do the math, machines do the calculation, and people make the decisions. What we're seeing now is that machines are not only good at calculating and processing and transacting, but there are many kinds of decisions that machines are as good or better at making than people. And one of the challenges for us now is to really understand what are the essential human skills, what are the things that we as humans can do, and what are the enduring human skills.

Some people talk about this as soft skills. I don't like the expression of soft skills. In business we like the idea of hard skills generally. But what becomes important is to understand [that] in every profession, in every business, in every organization, as machines get smarter, what are the unique things that we can do as individuals? We know what some of those are, right? Defining the problem. Pablo Picasso said a very interesting quote: “The problem with machines is that they only know the answers. What we know as people is we know what the questions are.” So deciding what questions are important, what are the design principles, [and] what are the questions that we should really be pursuing. What's the role of empathy? What's the role of nurturing? What's the role of communication? What's the role of narrative? Really trying to understand what we can do uniquely and essentially as humans, as machines get smarter is really going to be a central question. This is an individual question and this is a business question and obviously, as we said, we think this is a government question as well.

THOMAS FRIEDMAN: You know, if you think of [IBM’s] Watson—who's the best doctor in the age of Watson? It's very different. It’s the doctor [who] can ask Watson the best questions. If Watson's read every article ever written on cancer and no doctor can even think about approaching that, [and] then being able to ask Watson the right question about this patient and then translate that in an empathetic way to that patient and use Watson not as a substitute, but [as] an augmenter for that doctor’s own innate skills. And I think [as] anyone who's had an elderly parent in an Alzheimer's unit, as I have, or a nursing home—boy, they know the difference between that nurse, that caregiver who has both some medical knowledge and the kind of empathy to relate to your parent. And how much more would I pay for that person to be looking after my mom as opposed to the person who doesn't have those skills? I’d pay a lot.

TANYA OTT: People are living longer. Research suggests that those born in the 1990s and in the first part of the current century can expect to live to be 100. The question Jeff Schwartz, Tom Friedman, and many others are asking is: What does a 70-year career even look like?

We’ve got more thoughts on the topic—from Jeff Schwartz, Tom Friedman, and others in our Future of Work edition of Deloitte Review. You can check them out on I’m Tanya Ott for the Press Room. Thanks for listening—now get back to work. The robots are coming!

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