Monday, April 9, 2012

...the Class of 2012

By kay.e.strong


Spring is a most wonderful times of the year—at least for me! Spring brings with it renewal—vibrant flower blooms, tiny green leaf buds, sunnier dispositions, and untainted aspirations from new college graduates.  For the Class of 2012 the National Center for Education Statistics projects 1,781,000 bachelor’s degreed graduates with hope shining in their eye and a promise of reward in their heart.  To each and every one I wish them the best!

But…yup, there is a but.  McKinsey & Company reported that worldwide 200 million people are out of work with 40 million of those in the advanced economies. (Source: Help wanted: The future of work in advanced economies)  And the idea that governments can simply ramp up aggregate demand sufficiently to absorb the unemployed is foolhardy. A megaforce, technology-information-globalization (TIG), has changed the world of work forever.  By enabling a world of costless connection and free flowing information, TIG has refashioned the world to make “right next door” a ubiquitous phenomenon!  So, while our politicians have indulged in fiddling with divvying up the “revenue” pile, TIG has burned the world of work as we once knew it.  

Five trends are shaping the landscape of employment: the impact of technology, the widening skills gap, structural mismatches in geography, growing pools of untapped talent and disparity in income growth, according to McKinsey & Company. Their discussion paper provides sobering evidence that the only way to clear our employment deficit is to institute national policies that address the impact of each of these trends.  

Let’s focus on the first trend.  Technology changes everything. 

The median number of years at a job has plunged from the traditional 20-year career to 4.4 years since the 1970s.  Your parents had careers; you will not! So what does this mean for those caught in the revolving door of disposable jobs?  

First, recognize the certain types of employment have longer staying power. Between 2000 and 2009 five million “interaction” jobs were created, while more than three million production and transaction jobs disappeared (BLS). In essence, interaction jobs require a “human touch”—involving complex problem solving and experience in a specific context. Think social workers or massage therapists. If an algorithm can be set to a job or any portion of it, expect it to be automated…from the inner office to the surgical operating room. This process is known as “off-peopling.”  Machines can and do do it with more precision and less cost. 

Second, purge yourself of the notion of “preparing for a career.” Worker churn is the new reality. TIG gives employers the advantages of shopping the world for the best-in-class skills, not unlike TIG gives shoppers the low-cost shopping experience of world markets.  Workers must mentally prepare for maintaining continuous employment rather than a one-time career.  That bachelor’s degree has limited shelf-life. 

Now, toss in the idea of hyperspecialization. Hyperspecialization is the process of parceling work into smaller and smaller units that are slung to the far corners of the globe for completion.  It’s not all bad news.  Professor Tom Malone of MIT Sloan School of Management argues that hyperspecialization offers workers the promise of choosing their hours and tasks, while companies cost save through better use of their own employees’ time.  To connect workers with work, Malone anticipates the rise of a new class of intermediaries—“brokers of work.” Think temp agencies on steroids that connect companies with tasks to complete to communities of hyperspecialized workers.

“If these niche start-ups can mature into larger-scale and more trusted suppliers of work, hyperspecialization will go mainstream.  They will grow by ratcheting up their worker communities and client bases in tandem, ensuring that the former have ample projects to choose from and the latter have sufficient pools of talent to draw on.”   (Source: The Age of Hyperspecialization in HBR)

So where does that leave the Class of 2012?

As new explorers in an emerging world of work! A world redefined by renewable employment rather than a lifetime career. A world in which flexibility, adaptability and continuous learning are highly rewarded. And a world in which the corners of the globe work shoulder to shoulder.   
What an awesome gift for the Class of 2012!

Kay Strong, Ph.D., Southern Illinois University, M.T., University of Houston, M.A., Ohio University; Associate Professor at Baldwin-Wallace College; Areas of expertise: international economics, contemporary social-economic issues, complexity and futures-based perspectives in economics. E-mail: kstrong@bw.edu

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This blog lives under the auspices of the Department of Economics whose mission has been to hold high the lantern beaming an "economic way of thinking" onto the world. Selfishness, rationality and equilibrium have been central to the teaching of an economic way of thinking rooted in the Renaissance. And, in this regard, the department has faithfully stayed the course. The intent of this blog, thinking out loud..., however, is to entertain exchanges which may challenge the centrality of economics as we teach it.