A look at the future of labour
The pessimists and the optimists contend with each other in the media about the impact of new technology on labour. Which side are you on?
On the side of the ‘realists’. Polarising around the impact of new technology isn’t necessary. You hear stories about boring jobs – let’s say modern slave labour – which will be a thing of the past thanks to machines. That’s fantastic, but there’s also a downside. In terms of income, status and certainly life goals. What will people do with their lives if they hardly have to work? And will all those mums and dads with children suddenly be dropping back to a basic income?
Will there be talk about winners and losers?
Whoever speaks about winners and losers believes in the “end game” as the starting point. We are in a context in which an employee performs work and in exchange receives a salary with which he or she can consume. Through this consumption, new work is created to be able to make more stuff, which in turn can be sold and so on. I believe that changes to this context will be gradual. Think of it as an evolution.
An interesting survey among trade unions would be to ask their people what they prefer: receiving purchases at home or being stuck in traffic on the way to the store to do your shopping. Comfortable home delivery is only made possible thanks to night work and flexible working. If that is what the consumer wants, then we must adjust the context accordingly. In that respect, Belgium is the misfit in Europe. Just look at Germany with Zalando and the Netherlands with Coolblue for example.
Have Belgian businesses missed the boat?
That is obviously a current snapshot, and there are certainly opportunities for Belgian companies, but time is running out. There is still potential for local players in this new context. Aside from a few sectors, such as digital advertising, because that game has already been played by Facebook and Google who have split the cake worldwide.
In retail, the situation is serious but not hopeless. Recently I gave a workshop at Comeos for the ‘captains of retail’ in Belgium. These people know very well what is happening, but they cannot innovate further because of the Belgian legislation, which mainly protects local traders. Rules about working on Sundays and flexible work are inherited from the past. And what about the social law inspectors, who can come at any moment to check the work schedule, because everyone is supposed to work from 9 to 5…? As an employer you even risk a criminal conviction!
The past is no longer, to the regret of those who envy it?
Some of the achievements of the labour market are really no longer of this time. Look at how everything that trends towards “the right to…” is shifting. The right to work, the right to Sunday rest, to fixed hours, etc.
Let’s take Carrefour in Belgium. It seems that companies that make a profit are not entitled to restructuring. But, whoever wants to forbid these companies from adapting to reality is pleading for their disappearance. The retail sector of today is clearly in crisis. The old models with a 38-hour work week are dead in this sector and in the new models, preserving work for everyone is not a realistic scenario.
Isn’t there too much emphasis on change? Usually, it occurs more gradually than expected.
One must indeed be careful because changing too quickly is a risk. You need to look at the effects in the medium term. The effects in 10 to 20 years are often unpredictable. For example, I don’t think that Artificial Intelligence is going to consume us, as Elon Musk predicts.
A lot also varies from sector to sector. In retail, the investments are very high, making the starting threshold enormous. In the creative sector, for example, there are still possibilities. Think about designing television formats. Small Belgian players can still create a furore in this sector.
Many jobs are disappearing because of innovation – a robot now costs an average of 1/3 of a person. Will we be massively unemployed by 2030?
Once again, I look at this as a realist. You have to manage it now because I don’t believe that the problems will solve themselves. In retail and finance, the cooperation between man and machine is already a fact.
In Duval Union Consulting we work with models that predict that within X years so many stores will disappear and that the remaining stores will have a different function. Much will shift to online. The trick is to predict which technology will take over. Work such as filling shelves or manning cash desks will disappear. Delhaize stores may become showrooms or tasting centres. Therefore, we are able to predict new business models today and map out the new skills required.
What are the skills for the future?
The problem is that education has not been adjusted. Teaching a young person a trade today is really quite useless. Passion, entrepreneurship, problem-solving thinking and creativity are the skills that matter. Due to the outdated education, there is a risk of ending up with a large group of stragglers because they won’t be educated for the new world.
Fortunately, many things do still remain human work. Think of an architect. Artificial Intelligence can perfectly well draw a house for a family of four based on thousands of previous plans. However, creativity will still be necessary to tailor the computer plan specifically to each family with their own dreams and wishes.
Do you believe, like Klaus Schwab, the founder of the World Economic Forum, that we are already in the 4th industrial revolution, also called “the 2nd Machine Age”?
These are waves, not straight lines, but the switch to the 4th industrial revolution is in any case universal in all sectors, both in B2B and in B2C. The clock ticks faster and faster and at different times in one sector versus the other. Just think about the travel industry and what will happen to your flight ticket. Reserving a ticket will disappear completely. In public transport, a ticket per means of transport will also disappear, and we will go to a system of variable pay. Everything, therefore, is evolving towards a kind of Uber-model, but that could possibly take another ten years. The new store concept from Amazon Go is a robot where you can walk around. Everything is automated and measured down to the smallest details.
Employment will be different. That is why people such as Bill Gates are calling for taxes on automation because it is going too fast. The gap between technological innovations and reality should not be too big.
We are also moving toward a so-called ‘passenger economy’ in which we get 2 to 4 hours extra free time per day thanks to, among other things, self-driving cars. The challenge will mainly be to create value in the time that will be gained.
What is your opinion: self-innovation as a company or investing in innovative start-ups that can switch faster than the parent company?
Within Duval Union Consulting, we use a simple model for this: look at a classic company as a battleship. It is cumbersome, polluted, driven by coal, but with a good captain and a professional crew. Those who want to innovate and work in a more ‘agile’ manner have a few choices. The ship is out of date, but there is still a lot of value – such as human capital – on board. Instead of sinking the ship, you could first set up an innovation cell. A kind of technology lab on a tropical island. It’s fantastic there, but it doesn’t affect the battleship. A second scenario would be to buy a speedboat. It can sail in all directions, but it doesn’t have to tow the battleship. The solution, therefore, is to use a fleet of speedboats all sailing in the same direction. Some boats will either sink or arrive at the destination faster, but eventually, together they will change the course of the battleship in a positive way.
Which companies set a good example to withstand the 4th industrial revolution?
A good example in Retail is the Chalhoub Group in the Middle East, a market leader since the 1950’s in the luxury segment. They recognise that store concepts are under pressure. They apply our fleet model to adapt to the new reality.
Closer to home, Torfs shoes is an example. The company has a flat organization and a culture of optimism. As an SME, they manage to be innovative while having limited resources. In another sector, we see UNILIN – known from Quick-Step – who implement innovations quickly. They reorganise their teams and apply transversal ownership for their core projects.
Jo Caudron, founding partner of Duval Union Consulting
Jo Caudron is active in the online industry for +20 years. He (co-)founded over two dozen of digital companies and uses his entrepreneurial experience to offer rock&roll-style business consulting to global companies in different industries. He is founding partner of Duval Union Consulting, a business consulting company that focusses on helping organizations to transform.
As a published author ("Digital Transformation" - sold in 45+ countries http://www.digitaltransformationbook.com ) and inspirational speaker, he wants to spread his vision on how all businesses should adapt to the disruptive power of digital first competitors. His presentations focus on how to go beyond the fear of disruption and actually manage transformation.