Last week, I started to focus on the “Future of Work.” When we dream about how work will change, with or without Covid-19, we have disruptive innovation, or creative destruction, in mind, given the fact that businesses were already faced with those challenges during the last decade.
Actually, it was Austrian Economist Joseph Schumpeter, in the first half of the 20th century, who coined the term “creative destruction,” which he described as “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Schumpeter describes this as paradigm shifts in history created by innovation and the development of new technology thereby developing entirely new economic systems which societies must adapt to.
Creative destruction will lead a society to a new level of quality of life and prosperity as a by-product of innovation but will also undergo uncomfortable and difficult transition periods in the short term hence, the destructions.
When we are looking at the Future of Work, we are actually also thinking of the Fourth Industrial Revolution in the making. As industrial revolutions have consequential effects on the standards of living, means of production, innovation, technology, income, the nature of jobs among others, let’s take a brief look at the previous industrial revolutions and their effects.
The First Industrial Revolution started in Britain in the mid-18th century, which created the transition from the agricultural life and way of work to industrial work as sources of energy shifted from wood to coal. This gave rise to factories and machines, as well as an exodus of workers from the rural areas to urban centers to look for better opportunities. As the factories grew, new skills were demanded as well.
The changes in the First Industrial Revolution eventually laid the ground for the Second Industrial Revolution in the late 19th to early 20th century. One of the major innovations during this revolution is the beginning of electrification which led to mechanization of production and improved the efficiency of assembly lines. Telephones and railways improved not only mobility for both goods and people but communication as well especially overseas.
The first two industrial revolutions paved way to the transition from agriculture to industry, mass production, and the movement of people from rural to urban centers for factory work. However, the Third Industrial Revolution introduced a new game changing technological development: digitization.
The Third Industrial Revolution is said to have started in the late 1990s and paved the way to the digitization of productions, creation of software, robots, 3D printing, major improvements in telecommunications, and the introduction to the Internet among others and, thus, the term “The Internet of Things” was born.
This opened entirely new segments of jobs which require different skill sets altogether. The Economist in a 2012 report on the Third Industrial Revolution noted that these jobs include “designers, engineers, IT specialists, logistics experts, marketing staff and other professionals. Many dull, repetitive tasks will become obsolete: you no longer need riveters when a product has no rivets.”
The Third Industrial Revolution also brought rise to small-medium enterprises who have benefited from digitization thus, giving birth to Silicon Valley.
If we forget the Covid-19 pandemic for a while, then this is it where we are today, living with constructive innovation and redesigning our businesses. The question is how the Fourth Industrial Revolution could look like and what consequences that industrial revolution will have on jobs and businesses.
Excited or scared? I will discuss the bridge from today to the “Future of Work” in my next columns, looking at short-term, mid-term and long-term steps to become part the Tomorrow’s Work and identify the skills shift from today to tomorrow.
I am currently working on “The Future of Work” in cooperation with The Asia Foundation-Philippines. Feedback is more than appreciated; you may contact me at hjschumacher59@gmail.com. However, note that the views expressed in this article do not necessarily reflect the views of The Asia Foundation-Philippines.