Mon, 27 February 2017
Enrico Moretti is a professor of Economics at the University of California, Berkeley. His research covers the fields of labor economics and urban economics. Professor Moretti’s book, “The New Geography of Jobs”, was awarded the William Bowen Prize for the most important contribution toward understanding public policy and the labor market.
His research has been covered by The New York Times, The Wall Street Journal, The Washington Post, Forbes, The Atlantic, Businessweek, The Economist, The New Republic, CNN, PBS and NPR. He lives in San Francisco with his wife and the son.
When considering the overall ‘health’ of the US economy, Professor Moretti believes that it is generally good. Compared to the time period of the great recession, job creation has picked up. Additionally, within the last six months, wages have picked up. When asked about how to assess the ‘health’ of the economy, he suggests that rather than look at day-to-day changes, such as the media, focus on the yearly changes. That gives a more realistic perspective.
Overall, American’s with a high school diploma have found their wages reduced by 20% and are less well off than the previous generation. On the other hand, those with associate’s college degrees or above– are doing better each passing year. This includes their standard of living, not only salaries but future outlook, their overall assets, and even their marital stability. This has created significant differences in earnings between those with more education and those with less. In fact, 30 years ago, it was less than a 40% spread; now it’s more than double – at 80%.
For the past 30 years the US has been losing 350,000 blue collar positions in manufacturing per year. A change that is not just a US phenomenon, but is also found in other advanced countries – such as Japan and Germany. This has been predominantly based on increased automation in factories
Automation – robots, artificial intelligence – has had a profound effect on jobs. The new technology and automation have changed the face of jobs in manufacturing plants. Fewer people are required and instead of blue collar workers, they are highly skilled engineers. This change has lead to an increased need for higher skilled workers.
When asked about the US cities that have undergone the most amount of change in the past 30 years, Moretti cited three that have had positive transformations: Austin, Texas, Raleigh/Durham, North Carolina and Seattle, Washington. Each of these has become an area of global innovation, has an availability of an excellent work force and also provides high wages.
In contrast, those he sees struggling are found in the ‘rust-belt’. For example, Detroit and Flint, Michigan as well as Rochester, New York, which have lost population due to a reduction in the need for traditional manufacturing jobs and therefore, lower wages and innovation.
Specifically, Moretti has found that the US can be divided into ‘three Americas’.
1. American Brain Hubs – strong workers with more than 40% of the population which holds a college degree. These include cities such as Boston, New York City and San Francisco. These cities are productive, innovative and provide higher salaries.
2. Former Manufacturing – struggling, shrunk in size, lost in terms of aggregate population.
3. Neither Brain Hub nor Former Manufacturing – maintaining current productivity and fairly stable population
What you will learn in this episode:
Mon, 20 February 2017
Michael Dawisha has been the CIO in the division of Residential and Hospitality Services of Michigan State University for over eight years. He has previously been the CIO of a large medical non-profit organization.
As the global trend toward travel and distant communication continues, businesses are finding themselves competing with a greater number of potential employers. Talented employees are pursued and leadership is forced to make decisions that will effect if these employees stick around.
With a global trend toward technology, how does a large non-profit organization like a university keep their employees while a world of options and bigger offers await? What works and what needs to change to keep up with the new age work force?
Michael Dawisha notes the observable change from recruits being hired in with the expectation of being around for a full career. He wants the most talented employees on his team and he now has to consider the quality of life in his region compared to the world for the 1000 full time employees and up to 7000 part time employees that are a part of his division. Because Michigan State is a University, their focus is on education not profit. This forces talent retention tactics to go beyond the standard pay raise. Dawisha talks about treating people like gold. Instead of viewing management from top to bottom, you build an organization by keeping the employees happy. While Dawisha says this technique has been working well now, he acknowledges that businesses will need to adjust for a future with shorter stays by employees.
One specific technique that is used at MSU is to get people involved in projects outside their core work functions. You might find a web programmer helping design the new room in the organization's dining area. This allows participants to get a first hand experience to the culture of participation and diversity at the organization. Its during the end presentations that you can tell everyone involved was honored to be volunteered, happy to participate, and proud of their work. The programs that people are a part of help enforce the idea that they are making an impact at the company and in the world. This opportunity for remarkable input is in-tune with the desires and beliefs of the young emerging work force.
In addition to the techniques that have been tried and tested- Dawisha mentions using the data gained from their own people analytics. With new technology the personal bias can be taken away from the data collection and better informed decisions can be made. The increase in technology has also opened up new avenues of study, in one case suggesting Dawisha observe the correlation between area code of the employees and the longevity of their tenure. The technology increases help guide Dawisha's decision making, but compared to other organizations that might be for-profit the education industry is behind
To adjust for the future Dawisha talks about becoming nimble. Instead of reacting to employee offers from other organizations, be proactive- cut down on the number of employees seeking other job offers. Employees often are rooted and are not looking for a reason to change their living situation, Dawisha handles these events on a case by case basis- proving that relationships is still a big part of talent retention.
What you will learn in this episode:
Link From The Episode:
(Music by Ronald Jenkees)
Mon, 13 February 2017
Devin Fidler is the Research Director at the Institute for the Future and the Founder of Rethinkery Labs, a software defined organization that specializes in developing technologies to automate management.
Automation is definitely a hot topic these days and it is one that sits at the forefront of many discussions around the future of work. There are mainly two camps of people in this topic of discussion. There are those who feel that automation is inevitable and that while it will take some human jobs, it will also create a lot more human jobs and therefore won’t be as scary as it seems. They also believe that automation won’t take over as many jobs as some experts are predicting. The other group is made up of people who believe that there is no stopping the takeover and that automation will take over a majority of jobs and humans will be displaced.
Fidler believes that automation will definitely disrupt traditional jobs, however, he says it is not all negative. He says one of the real issues is that we really need to reevaluate what we define as jobs. We are likely to see more work for humans, but it’s the jobs themselves that will be the issue. With automation, finding work can become much easier as software will help match up humans to the right task, which means you can spend more time doing the work you love to do. It can also help smooth out the training process and make it more individualized to the employee. Fidler feels that “the [human] jobs question is important, but it’s not as apocalyptic as it’s sometimes framed”. Automation is not the end of human jobs, although it may change the way things like benefits, career progression and retirement are structured.
Up until now automation has really been seen as something that would takeover jobs like cashiers, bankers and factory workers. But Fidler talks about how software is moving into the C-suite and management roles. One example of this is Uber, where they are automating middle management. Today Uber is the third largest company in the U.S. (based on number of employees), right after Walmart and McDonalds. When you look at traditional taxi services the employees report to dispatchers. They rely on the dispatchers to tell them where to go and when, which routes to avoid and for help when they have vehicle issues. Now Uber has automated this process. Uber uses software to route their drivers, schedule pick-ups and even perform employee evaluations.
There is another company that Fidler mentioned that has AI on the board. For every investment decision they have all the board members weigh in and give their opinions on what to do. In this company they have given one of the board seats to an AI program that allows the software to weigh in and give a vote on each investment as well.
So how fast will this shift in our workforce take place? Fidler says we are already seeing a select few companies taking this move towards automating management, so in theory, it’s already here. But it will take some time before it becomes widespread and mainstream. A good guess would be in the next 10 years. Fidler talks about how much change we have seen in the past 10 years; smartphones, Watson, and self-driving car prototypes. Think of how much our world could change in just 10 more years.
In this shift towards a day when software could run the company, Fidler gives advice he feels can span across all levels of workers from newly hired employees in their first job up to heads of organizations who have been there for 30+ years. He says, “you can’t take any momentum and previous advantages that this part of the world has had for granted. It is a new game where rewards will go to those who figure out what the new logic looks like”. You cannot stay complacent and think that you will be safe from automation. It is also important for us to have these conversations now, about what we want the future of work to look like and what we want these automated programs to do while it is in the early stage. Fidler says, “the Industrial Revolution really favored the U.S., if we want the same kind of thing we have to do it deliberately, it can’t be by accident”.
What you will learn in this episode:
Links From The Episode:
(Music by Ronald Jenkees)