Tag Archives: Business Innovation Factory

On Work, Consumption, Economy and the Whole

Saul Kaplan, the founder of the Business Innovation Factory–where incidentally I will be a storyteller on 16 September–writes a Labor Day post on his blog listing what he calls 20 random thoughts on the Future of Work. (They’re not so random, really, but it’s a really good list.) Naturally agreeing with points such as

Projects are more important than jobs; and

Free agent nation becomes a reality,

I got to thinking that change of this scale will have GINORMOUS downstream effects (I’ve been told by some very reliable sources that ginormous is now officially a word!). Because if we change how we work, don’t we in fact CHANGE EVERYTHING? Saul touches on some of these broader implications when he notes that

Workforce and economic development are transformed and become indistinguishable; and

Work and social become indistinguishable

but what I’d like to do in my Labor Day post is draw these points out even more.

We cannot underestimate how important steady 9 to 5 work is to the American economy; it is that steady, predictable income that has allowed US consumers to become the BEASTS that we are. (It was part of Henry Ford’s genius to realize the connection between his profits and the wages he paid.) The US consumer has been the engine behind world economic growth since WWII. I wasn’t able to easily find a statistic on what percentage of the world economy is ingested by the US consumer–the closest I could get is the oft-cited data point on how we account for about a quarter of world energy consumption despite being in low single digits in percentage of world population. But you get some indication of the importance of US consumption to the world economy from the website of the Worldwatch Institute, which in its press release for its 2004 monograph on world consumption noted that “the 12 percent of the world’s population that lives in North America and Western Europe accounts for 60 percent of private consumption spending, while the one-third living in South Asia and sub-Saharan Africa accounts for only 3.2 percent.” It’s safe to assume the US consumer accounted for more than half of that 60 percent.

So let’s get in that trusty Time Travel Apparatus and fast forward let’s say 50 years. If the predictions about how work will change are true, then one of the implications–unless we come up with interesting new methods of compensation, question mark?–is that the steady income that drives American consumer consumption will dissipate, to be replaced with more aperiodic payouts. Presumably these payouts will average out to meet our needs and sustain roughly approximate standards of living, but not without some important adjustments. I would imagine, for example, that the average individual’s willingness to accept large revolving debt balances will weaken once she cannot rely on a regular, stable income. Similarly, companies and business models that are based on consumers handing over huge amounts of money on a regular basis, like the cable companies, may have to retool.

Many industries in fact will have to rethink. Agreeing to five years of car payments? I don’t think so!! The 30-year mortgage? Perhaps not!! It’s interesting that already in the car industry companies such as Zip Cars are introducing new ways to acquire the services of a car on a pay-as-you-go basis. And the shambles in the mortgage industry have led people to question the inviolability of the American dream of home ownership. Finally, the emergence of Cloud Everything probably will allow consumers to dispense with the need to own important consumer goods such as music, videos, books, etc.

So my hunch–a sophisticated analytical term–is that a redefinition of work will be the prelude to a redefinition of economic prosperity. Prosperity and economic growth would no longer be synonymous. I don’t know yet whether this will be a net plus or minus, although the optimist in me believes of course it will be a net plus. Certainly the world’s ecology could tolerate a break from constant growth, particularly growth dependent on mass utilization of finite resources. Again from the Worldwatch Institute, “WWF’s Living Planet Index, which measures the health of forests, oceans, freshwater, and other natural systems, shows a 35 percent decline in Earth’s ecological health since 1970.”

Nevertheless, there’s also a part of me that senses the wisdom of the view that the opposite of growth is death. Without economic growth, can we advance as a species and improve the lot of those who live and die without ever getting a chance to explore their human potential? I know many have conceptualized what they argue are more equitable economic models, but these always seem to ignore the demonstrable quirks of human nature.

Clearly, there’s still a lot of work to be done.