The Future of Work 4.0

In 1991, Robert Reich, the US economist and secretary of labor in Bill Clinton’s first administration, published a prophetic book entitled The Work of Nations with the subtitle “Preparing ourselves for 21st century capitalism.” Internet in those days was still in its infancy, the concept of shared economy did not exist, and Travis Kalanick, the billionaire founder of the taxi company Uber which has come to epitomize the shared economy and self-employment, was still studying computer programming.

In his book, Reich predicted quite accurately that in the future, countries will derive their prosperity from infrastructure, education, and the ability of people to cooperate, and that people would gradually end up in three categories of jobs: routine production workers whose numbers would continue to dwindle as they are replaced by robots and artificial intelligence; those providing “in-person” services; and “symbolic analysts,” i.e. those processing symbols, be it in the form of letters, patterns, or ones and zeroes. The third category, of course, will be the one generating the greatest added value because it will include people whose innovative ideas will turn many tried and tested production processes upside down.

Robert Reich could not have known that the word “Uberization” would be coined one day, that newspapers would run columns headed Economy 4.0, and that the industrial Internet and the Internet of Things would come into being. Nevertheless, he has described quite accurately that a rather small group of people—the symbolic analysts—would suddenly find themselves in a completely different position from the rest of the mankind and that capitalism, based as it is on a certain division of labor and skills that benefits all, would suffer a major upheaval.

The Shared Economy Has Much More Impact Than the Global Crisis

Faith in capitalism as a system was deeply shaken by the 2008 – 2009 global financial crisis, but the advent of the shared economy and Uberization in particular are likely to have a much more profound impact on the system and forms of employment than the—admittedly, serious and deep—crisis of the old system.

If one day people try to pinpoint the moment in history when there stopped being enough work for everyone, when the cost of data processing went down dramatically, and the speed of its transmission became astonishingly fast, most historians will home in on the year 2007. As American journalist Thomas Friedman writes in his most recent book Thank You for Being Late, it was in 2007 that a number of seemingly minute events happened which have, nevertheless, radically transformed the future of the world’s economy.

If one day people try to pinpoint the moment in history when there stopped being enough work for everyone, most historians will home in on the year 2007.

For example, this was when the first iPhone appeared on the market, driving telecommunications companies to invent revolutionary solutions for transmitting a growing amount of data through the air. Also in 2007, Twitter went independent, Google introduced its Android system, Amazon came out with its Kindle reader, and Intel started using new materials in their chips, which made them substantially faster.

In plain terms, this was a leap forward, one that ultimately resulted in a radical change of patterns and ways of making money in the capitalist economy. Many start-ups offer a large proportion of their services free of charge and demand payment only for what they label premium content. Monetizing ideas is becoming increasingly difficult because fast and cheap connectivity and the use of Cloud—i.e. computer power that can be purchased cheaply, easily, and flexibly—has made a number of production processes extraordinarily cheap.

Visionary Ideas Change the Attitude to Work

All this has gone hand in hand with the advent of robotics and artificial intelligence – in slightly simplistic terms, one might say that the former is replacing the blue-collar (i.e. manual) workers and the latter the white-collar workers. For example, insurance companies have begun replacing armies of analysts with sophisticated computer systems such as IBM’s Watson (launched in 2007), by themselves capable of gathering all the available information on how traffic accidents happen and what their consequences are, and then calculating their probability with great accuracy.

Visionary ideas such as Elon Musk’s electric cars, which could turn the entire automotive industry upside down, or journeys into space often smack of utopias. They are alluring and, at the same time, ultimately change the attitude to work in a way reminiscent of the Bolshevik revolution – you cannot make an omelet without breaking eggs or, in this case, jobs.

Monetizing ideas is becoming increasingly difficult because fast and cheap connectivity and the use of Cloud has made a number of production processes extraordinarily cheap.

Jean-Luc Mélenchon, the most left-wing candidate in this year’s French presidential election, who garnered nearly 20 percent of the vote in the first round, pledged to tax robots – and he had a point. Introducing a guaranteed unconditional basic income paid by the state regardless of whether people hold down a job or not offers a kind of solution to the visibly dwindling number of jobs in our industrial societies. However, the money for this income has to come from somewhere. Sweden is experimenting with a 6-hour working day, while Finland has already started testing basic universal income on a 2,000-strong sample of its population.

The left criticizes big companies for turning people into the cheapest possible labor, Uber style, since workers who are under the threat of being replaced by cheap and productive robots and artificial intelligence are often willing to work for very low wages and accept conditions that seem to take workers back to the nineteenth-century pre-trade union era.

Uber drivers are a good example: in the US the company keeps lowering the rates they may charge their customers, thus reducing their chances of making money. However, since they are not employed and technically do not count as taxi drivers, their chances of fighting back are very limited. And if someone protests too much, the company can simply cut off their access to the app that directs customers their way and enables them to earn a living. Some Czech drivers have already had this experience.

We are thus coming to a painful realization: although it may sound like a cliché, the future of work is the ability to learn to keep learning all life long. Present-day primary school children are expected to choose their future jobs, yet they often pick those that are slowly disappearing and cannot pick those that have not yet been invented, although these are likely to be in the majority, given the fast pace at which the structure of economy is changing.

The economy is changing at an ever-accelerating pace, making one wonder if it might be evolving faster than people’s ability to adapt and respond to these changes.

At the moment, Central Europe tends to suffer from shortages in its labor force, but once the automotive industry undergoes a radical transformation and starts switching to electric cars, large parts of the Czech, Slovak, Hungarian, and Polish economy will be in deep trouble. And the car factory workers who have taken on loans for houses, cars, and their children’s education might find themselves in a very tight spot. And we are talking only about one branch of industry, albeit the largest one in terms of Central Europe.

Workers of the future will need knowledge and skill set that is radically different from the one schools are equipping them with. The economy is changing at an ever-accelerating pace, making one wonder if it might be evolving faster than people’s ability to adapt and respond to these changes. The future of work is thus not only an economic but also a political, social, and psychological issue.

Martin Ehl

Martin Ehl has been working for various Czech print and online media since 1992, since January of 2006 he is the Chief International Editor of Hospodářské noviny daily. He runs a regular bi-weekly column Middle Europa at English language Internet magazine Transitions Online (www.tol.cz), for this column he was awarded “Writing for Central Europe” prize in Austria in 2012. He is a co-editor of Visegrad Insight magazine.

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Current issue - 03/2017

The Way We Will Work

The Future of Work is already here–in Central Europe. Driven by continuing globalization, accelerating digitalization and dreaded automation, the Work is changing. What role will the modern state play in this process? And how gender roles will change? A sweat free paradise is coming. We must adapt to the technological progress and learn for the future growth.
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