Demands of a digital economy
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A French phrase goes: Plus ça change, plus c’est la même chose, “the more it changes, the more it’s the same thing.” Frederick Winslow Taylor in the early 20th century propounded the theory of Efficiency Movement in his legendary tome “The Principles of Scientific Management,” and today, we turn a full circle as the din over a smart workforce grows louder.
Yet again, central to the idea is increasing efficiency; but in an age of non-linear growth. If you examine US productivity vis-à-vis employment data during the period 1947-2000, it will be evident that job growth and productivity have had a pretty much directly proportional relationship. It’s only after 2000 that the decoupling happened and a widening gap between the two became evident. Productivity went up significantly, without creating a proportional increase in jobs in the 21st century.
Millennials are a curious mix. Arguably, they are the first generation of Indians who have access to more powerful technology (even digital) in their personal lives than what office environments generally provide. A trend which has birthed concepts such as BYOD (bring your own device) and security challenges that accompany in its wake. Another interesting insight: most companies don’t come readily equipped with the requisite “digital” talent. They will have to forge partnerships to scour talent and fill the gaps.
Car makers, for instance, are seeking collaborations with car-sharing services, battery suppliers for electric vehicles, car rental companies and connectivity experts. Business models have undergone a radical shift, and it’s impossible for incumbents to have answers to everything in-house.
It is highly unlikely that occupations will get automated in entirety. What’s likely to happen, and will also account for job losses, are specific activities which will get impacted due to technology. For example, the bank teller’s job has been redefined with the advent of the automated teller machine (ATM). However, this phenomena of redefinitions of jobs will strike across the line: chief executive officers and the blue-collared will be impacted unsparingly. And, the advantages extend beyond labour arbitrage alone. Improved reliability many times over lends obvious credence to the case for increased and enhanced automation.
Interestingly, technology which leads to the destabilization of jobs can also be used to stabilize redefined jobs. The multifaceted nature of most jobs entail that automation and human participation work in tandem. The areas which require human participation can be reworked based on the talent available today, which is often not constrained by geography. Machine learning and advanced analytics are putting pressure on the CEO’s job as well, as leadership roles get reoriented in a digital age.
Employers often balk at the question, “why should anyone want to work for us?” Just as digital is being leveraged to enhance customer experience, it can be put to effective use in creating a superior experience for employees as well. At each stage of the journey, a greater transparency can be brought in, with far quicker response on a real time basis. The wait is finally over!
How much of human capital management should remain with humans is a crucial decision. With increased automation, there’s a definitive risk of losing out on the “soft” issues and transcending towards “hard” structures impacting organizational health adversely.
Let’s look at the automobile industry today. Traditionally, it has been dominated by mechanical engineers. In a digital environment, suddenly, the shift is towards data scientists. Reality is, there’s a supply constraint in the latter category of talent. A leader would be challenged in balancing traditional skills and specialized talent, that digital economy demands.
The author is president of software body Nasscom.